Signage of HDFC Bank seen at one of its branch in Bengaluru, India. (Photographer: Anirudh Saligrama/BloombergQuint)

HDFC Bank Q3 Profit Rises 20%; Discloses NPA Divergence In Three Accounts

HDFC Bank Ltd.'s net profit missed estimates in the December-ended quarter even as India’s largest private sector bank's asset quality remained stable.

The lender, however, said it had under-reported bad loans by Rs 2,051 crore in the year ended March 2017, according to its exchange filing. It reported gross non-performing assets of Rs 5,885 crore for the period while the Reserve Bank of India identified bad loans at Rs 7,937 crore. The divergence pertained to three accounts.

One of the three accounts, which was still under review in the September-ended quarter, has been brought back to standard now, Paresh Sukthankar, deputy managing director at HDFC Bank, said at a press conference after the earnings announcement. The lender made floating provisions for the account in the last quarter which have been written back. The other two accounts the RBI noted continue as NPAs, he said. “Those had been disclosed earlier this financial year.”

For the quarter ended December, net profit rose 20 percent on a yearly basis to Rs 4,642 crore. Analysts tracked by Bloomberg had pegged the profit at Rs 4,718 crore. That was driven by a 28.7 percent growth in its dominating retail loans.

Net interest income, or the core income of the lender, rose 24 percent to Rs 10,314 crore, higher than the Rs 10,103 crore consensus estimate.

Asset Quality Stable

Gross non-performing assets as a percentage of the total book stood at 1.29 percent as of Dec. 31, as opposed to 1.26 percent in the quarter ended September. Net bad loan ratio also remained stable at 0.44 percent compared to 0.43 percent in the previous quarter.

Provisions for bad loans fell marginally to Rs 1,352 crore compared to Rs 1,476 crore at September-end.

 HDFC Bank Q3 Profit Rises 20%; Discloses NPA Divergence In Three Accounts

Other Highlights

  • Total advances stood at Rs 6.3 lakh crore, an increase of 4.4 percent on a quarter-on-quarter basis.
  • Retail loans accounted for 55 percent of the loan book while wholesale accounted for the rest.
  • CASA ratio stood at 43.9 percent.

Shares of HDFC Bank rose as much 1.26 percent to Rs 1,958.7 after the earnings announcement.