Moneycontrol
Last Updated : Jan 19, 2018 04:45 PM IST | Source: Moneycontrol.com

HDFC Bank Q3 profit rises 20%; loan growth strong, but has asset quality hiccups

Net interest income during the quarter increased 24.1 percent to Rs 10,314.3 crore compared to Rs 8,309.09 crore in corresponding period, with strong loan growth of 27.5 percent.

Private sector lender HDFC Bank has reported profit growth of 20.1 percent for quarter ended December 2017, with slight increase in asset quality and strong loan growth.

Profit for the quarter stood at Rs 4,642.60 crore, up from Rs 3,865.33 crore in year-ago. The growth was driven by net interest income, other income and operating profit.

Net interest income during the quarter increased 24.1 percent to Rs 10,314.3 crore compared to Rs 8,309.09 crore in corresponding period, with strong loan growth of 27.5 percent.

"Net interest income was driven by average asset growth of 16.6 percent and a core net interest margin for the quarter of 4.3 percent," the bank said in its filing.

The country's second largest private sector lender further said its loan growth was contributed by both segments of its loan portfolio with the loan mix between retail:wholesale at 55:45.

On the asset quality front, HDFC Bank said gross non-performing assets (as a percentage of gross advances) were higher at 1.29 percent in Q3FY18 compared to 1.26 percent in previous quarter and net NPAs (as a percentage of net advances) were also higher at 0.44 percent against 0.43 percent QoQ.

In absolute terms, gross NPAs as well as net NPAs increased nearly 6 percent each to Rs 8,235 crore and Rs 2,774 crore, respectively.

Numbers were largely in line with estimates. Profit was estimated at Rs 4,626.3 crore and net interest income at Rs 10,226.6 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18.

Provisions and contingencies for the quarter ended December grew by 88.8 percent to Rs 1,351.40 crore compared to Rs 715 crore reported in the year-ago period, but fell by 8.5 percent compared to previous quarter.

The core cost-to-income ratio for the quarter improved to 41.2 percent from 43.8 percent in year-ago period.

Operating expenses for the quarter ended December 2017 came in at Rs 5,732.20 crore, which translates into an increase of 18.4 percent compared to Rs 4,842.50 crore reported in the year-ago period.

Other income or non-interest revenue came in at Rs 3,869.20 crore which is 27.3 percent of net revenues for the quarter ended December 31, rising by 23.1 percent compared to Rs 3,142.70 crore reported in the year-ago period.

Operating profit during the quarter grew by 27.9 percent to Rs 8,451.3 crore compared to Rs 6,609.3 crore in same quarter last year.

The capital adequacy ratio (CAR) was at 15.5 percent for the quarter ended December compared to 15.9 percent reported in the year-ago period, the bank said. The regulatory requirement is 10.25 percent including capital conservation buffer of 1.25 percent.

At 12:07 hours IST, the stock price was quoting at Rs 1,944.40, up Rs 12.60, or 0.65 percent after hitting a record high of Rs 1,957.85 on the BSE.
First Published on Jan 19, 2018 12:10 pm
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