HDFC Bank reported a nearly 5% year-on-year rise in net profit to ₹19,510 crore for the September quarter, slightly below analyst expectations, as lower treasury gains weighed on earnings despite strong loan and deposit growth.
Mumbai, October 18 — HDFC Bank reported a nearly 5% year-on-year increase in net profit to ₹19,510 crore for the quarter ended September, compared with the corresponding period last year.
The profit was slightly below the ₹19,606 crore estimate compiled by Bloomberg.
Management attributed the relatively modest bottom-line growth to lower treasury trading gains compared with the year-ago quarter. Excluding the impact of treasury gains, the bank said profit growth would have been around 12.6% year-on-year.
The bank’s net interest income rose 9.7% to ₹34,619 crore during the quarter.
However, other income declined 3.6% year-on-year, again reflecting lower treasury gains.
HDFC Bank reported a net interest margin of 3.16%, down from 3.30% in the previous quarter and below analyst expectations of around 3.37%.
Outgoing Managing Director and CEO Sashidhar Jagdishan said the margin trajectory is expected to improve from the next quarter onwards.
He said margins had been affected by a higher share of non-retail assets and liabilities, along with the impact of FCNR(B) deposit mobilisation.
The full benefit from higher interest rates could take a few quarters to materialise as the bank adjusts its asset mix.
HDFC Bank’s gross advances increased 16.3% year-on-year to ₹32.20 lakh crore as of September 30, while total deposits rose 18.8% to ₹33.27 lakh crore.
Retail loans grew 11.7%, the small and mid-market loan book expanded 24%, and corporate and other wholesale loans increased 16.4%.
Deposits also remained strong. Current and savings account deposits grew 10.8%, while time deposits increased 22.8% year-on-year to ₹22.76 lakh crore.
The CASA ratio stood at 31.6%.
Asset quality improved during the quarter. The bank’s gross NPA ratio declined to 1.11% from 1.17% sequentially, while the net NPA ratio improved to 0.37% from 0.41%.
Provisions and contingencies increased 2.1% year-on-year to ₹3,574 crore.
The results also come amid a leadership transition. Jagdishan is set to retire later this month, with Anup Bagchi scheduled to take charge as MD and CEO on October 27.
Deputy Managing Director Kaizad Bharucha has also sought to step down effective December 31.
