HDFC Bank on October 16 reported a net profit of Rs 15,976.11 crore in the July-September quarter, which was up just over 50 percent on-year, in its first report since its merger with Housing Development Finance Corp (HDFC).
On a sequential basis, net profit rises 33.7 percent.
Net profit beat the estimates of the brokerage. According to the average of five brokers’ estimates, HDFC Bank is expected to register a net profit of Rs 14,780 crore rising by 39.4 percent year-on-year (YoY).
The rise in net profit of the bank was aided by the improvement in the net interest income and net revenue of the bank.
Net interest income
The net interest income of the bank in the reporting quarter rose over 30 percent on-year to Rs 27,385 crore. In the similar period last year it stood at Rs 28,617 crore.
Bank's net revenue grew 33.1 percent on-year to Rs 38,093 crore in the second quarter of the current financial year.
The reported net interest margins (NIM) of the HDFC Bank was at 3.4 percent on total assets in the July-September quarter.
"Impact of I-CRR on NIMs was around 5 to 10 basis points. Further, we have taken certain calls on liquidity management," said Srinivasan Vaidyanathan, Chief Financial Officer at HDFC Bank during the earnings call of second quarter.
Core net interest margins of the bank in the reporting quarter was at 3.65 percent on total assets and 3.85 percent on the interest earnings asset, release said.
Asset quality
The gross non-performing assets (NPA) ratio of the bank deteriorated to 1.34 percent in the reporting quarter, from 1.23 percent in a year ago period, and 1.17 percent in a quarter ago period.
Similarly, net NPA ratio of the bank stood at 0.35 percent in July-September. In the similar period last year, net NPA ratio of the bank was 1.23 percent, and 1.17 percent in a quarter ago period.
Also read: HDFC Bank Q2 preview: Profits to grow while margins decline
In absolute terms, gross NPA was at Rs 31,577.89 crore in the July-September quarter, as compared to Rs 18,301.00 crore in a year ago period. In the previous quarter, gross NPA stood at Rs 19,064.12 crore.
Whereas, the net NPA of the private sector lender in the reporting quarter was at Rs 8,072.79 crore, as against Rs 4,882.67 crore in a similar period last year.
On the asset quality, Vaidyanathan said that around 22 basis points (bps) impact on the NPA was from the non-individual book of the erstwhile HDFC Ltd. On absolute terms, it was around Rs 4000 crore to Rs 5000 crore.
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