HDFC Bank’s net profit rises 20% YoY to Rs 10,605 cr in Q2, NII jumps 19%

HDFC Bank on Saturday reported a 20.1 per cent year-on-year (YoY) increase in net profit to Rs 10,605.8 crore in the July-September period.

The bank’s profit after tax rose 15.3 per cent from Rs 9195.9 crore in April-June.

For the quarter under review, the private bank’s net interest income, which is the difference between interest earned and interest expended, grew 18.9 per cent on-year to Rs 21,021.2 crore. India’s largest private lender said the core net interest margin was at 4.1 per cent on total assets and 4.3 per cent based on interest-earning assets.

As on September 30, HDFC Bank’s total deposits were at Rs 16.73 trillion, registering a growth of 19 per cent over the same time a year ago. Current account-savings account (CASA) deposits, which are low-cost deposits, grew by 15.4 per cent, with savings account deposits at Rs 529,745 crore and current account deposits at Rs 229,951 crore.

The CASA deposits accounted for 45.4 per cent of total deposits as on September 30, the bank said.

The strong growth in deposits comes at a time when shrinking liquidity in the banking system and a multi-year high in credit demand have pressured banks to raise funds.

As on September 30, HDFC Bank’s total loans were at Rs 14.79 trillion, up 23.4 per cent from a year ago. Domestic retail loans grew 27 per cent on-year for the period under review, while rural and banking loans grew 31.3 per cent. Other wholesale loans registered a rise of 27 per cent on-year in July-September. The bank said that overseas loans comprised 3.1 per cent of the total advances.

As on September 23, growth in overall bank credit was at 16.4 per cent year-on-year, while growth in deposits was at 9.2 per cent, the latest RBI data showed.

For the quarter ending on September 30, HDFC Bank’s other income, excluding trading and marked-to-market losses, grew by 16.7 per cent.

The lender reported an improvement in asset quality for the period under review, with gross and net NPA ratios declining both sequentially and yearly.

As on September 30, HDFC Bank’s gross NPA ratio was at 1.23 per cent, lower than 1.28 per cent a quarter ago and 1.35 per cent a year ago. The net NPA ratio was at 0.33 per cent versus 0.35 per cent a quarter ago and 0.40 per cent a year ago. The total credit cost ratio was 0.87 per cent, compared to 1.30% for the September quarter.

As of September 30, HDFC Bank’s Basel III capital adequacy ratio was 18 per cent versus 20 per cent a year ago. The regulatory requirement for the same is 11.7 per cent.

“Tier 1 CAR was at 17.1% as of September 30, 2022, compared to 18.7 per cent as of September 30, 2021. Common Equity Tier 1 Capital ratio was 16.3 per cent as of September,” the bank said.

For the quarter under review, the HDFC Bank’s operating expenses stood at Rs 11,224.6 crore, registering a rise of 21 per cent from Rs 9,277.9 crore a year ago.

The bank’s cost-to-income ratio was at 39.2 per cent during the quarter. Pre-provision operating profit was at Rs 17,392.2 crore in July-September. Stripping away trading and marked-to-market losses, the bank’s pre-provision operating profit grew 16.6 per cent on-year in July-September.