HDFC BANK PROFIT BEATS ESTIMATES, RISES 18%

HDFC BANK SHARES CLOSED 2.38% HIGHER AT ₹1,496.60 ON THE BSE, HAVING HIT A RECORD HIGH OF ₹1,499 INTRADAY.

HDFC Bank Ltd on Friday reported a higher-than-estimated fiscal fourth-quarter net profit and stable asset quality, prompting investors in India’s most valuable bank to drive its shares to a record high.

Net profit rose 18.25% to ₹3,990.09 crore in the three months ended March 31 from ₹3,374.22 crore a year ago.

Net interest income (NII), or the core income a bank earns by giving loans, rose 21.49% to ₹9,055.1 crore in the March quarter from ₹7,453.34 crore a year ago. Non-interest income including fees and commissions gained 20.25% to ₹3,446.26 crore.

The bank’s gross bad loans as a percentage of total loans, at 1.05%, were little changed from end-December, although higher than 0.94% a year earlier.

“In the last one year we have seen a 10 basis points increase in gross non-performing assets... which is not out of line… It is a challenging environment,” said Paresh Sukthankar, deputy managing director.

HDFC Bank has been a standout performer in a banking industry beset by ₹7 lakh crore of stressed assets — the legacy of an economic slowdown that stalled projects and squeezed corporate cash flows, making it difficult for borrowers to repay debt.

HDFC Bank’s “asset quality remains one of the best in the system”, said Alpesh Mehta, a sector analyst at Mumbai brokerage Motilal Oswal Securities.

Provisions and contingencies jumped 76.28% to ₹1,261.80 crore in the fiscal fourth quarter from ₹715.78 crore in the preceding quarter. Net non-performing assets (NPAs) rose 0.33% in the fourth quarter from 0.32% in the previous quarter and 0.28% in the same quarter last year.

HDFC Bank’s capital adequacy, a measure of financial strength expressed as the ratio of capital to risk-weighted assets, was 14.6% at the end of March, compared to 15.5% in December.