HDFC Bank Q1 profit rises 20%
MUMBAI: HDFC Bank Ltd on Monday reported a 20.2% rise in its net profit for the June quarter on higher interest income. Its asset quality worsened as expectations of loan waivers affected recoveries from farmers.
Net profit rose to ₹3,893.84 crore in the three months ended June 30 from ₹3,238.91 crore a year earlier. Fourteen analysts polled by Bloomberg had estimated a profit of ₹3,914.50 crore.
Net interest income (NII) or the core income a bank earns by giving loans increased 20.4% to ₹9,370.74 crore from ₹7,781.44 crore last year. Other income jumped 25.3% to ₹3,516.66 crore.
Total advances rose 23.4% from a year ago to ₹5.81 lakh crore, while deposits rose 17% to ₹6.71 lakh crore. Speaking at a post results press conference, deputy managing director Paresh Sukthankar, said the bank continued to maintain loan growth rate, which was healthy in both retail as well as the corporate book. As of end June, retail loans formed 54% of the total book. He said while the demand for retail loans across product categories was strong, on the corporate side it was mainly for working capital, trade finance and loan refinancing .
Asset quality was the only blip in the fiscal first earnings of the private sector lender. In the quarter, of the total increase in gross bad loans, 60% was from its agriculture loan portfolio.
“Recoveries from agriculture advances were impacted during the quarter by borrower expectations of farm loan waivers arising out of policy announcements in certain states. These loan waiver policies are in the process of being finalised and implemented. As a prudent measure, the bank has enhanced specific provision coverage for its non-performing agricultural advances,” the bank said in a release.
Total bad loans rose 47.2% to ₹7,242.93 crore from ₹4,920.89 crore a year ago. Quarter-onquarter, it increased 23.06% from ₹5,885.66 crore. Gross non-performing assets (NPAs) rose to 1.24% as compared to 1.05% in the previous quarter and 1.04% in the year-ago quarter. Net NPAs were at 0.44% in the June quarter compared to 0.33% in the previous quarter, and 0.32% in the same quarter last year.