HDFC Bank logs 22.3% jump in Q2 net at Rs 11,125 crore on lower provisions

HDFC Bank on Saturday reported a 22.30 per cent jump in its consolidated net profit for the September quarter at Rs 11,125.21 crore, helped by a reduction in money set aside for bad loans.

On a standalone basis, the largest private sector lender's net profit rose by over 20.1 per cent to Rs 10,605.78 crore as against Rs 8,834.31 crore in the year-ago period and Rs 9,196 crore in the preceding June quarter.

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The core net interest income climbed 18.9 per cent to Rs 21,021 crore on the back of an over 23 per cent jump in advances, while the net interest margin was stable at 4.1 per cent.

The other income showed a marginal 2.63 per cent growth to Rs 7,596 crore on account of a loss of Rs 253.1 crore on sale or revaluation of investments as against a gain of Rs 675 crore in the year-ago period.

The bank said the other income growth excluding the mark-to-market losses incurred amid the rising rates scenario stood at 16.7 per cent.

Amid the 'war for deposits', where some banks have reported a wide gap between advances and deposit growth, the lender reported a 21 per cent increase in the deposits. Share of the low-cost current and saving account deposits stood at 45.1 per cent as on September 30, 2022.

The overall share of gross non-performing assets improved to 1.23 per cent of the book as against 1.35 per cent in the year-ago period and 1.28 per cent three months ago.

The amount set aside as provisions and contingencies reduced sharply to Rs 3,240 crore, as against Rs 3,925 crore, thus aiding the bottomline growth, HDFC Bank said. Over Rs 3,000 crore of the amount set aside during the reporting quarter was for specific loan loss provisions.

On the restructuring front, the bank said it is carrying Rs 7,851 crore of advances as standard restructured category, which includes Rs 5,256 crore of personal loans. It said Rs 3,343 crore of loans slipped during the April-September period (first half of the fiscal), Rs 1,765 crore was written off and Rs 2,196 crore was paid by borrowers.

The 23.4 per cent loan growth was driven by corporate and wholesale advances growth at 27 per cent, while retail advances grew 21.4 per cent and the commercial and rural banking segment reported a 31.3 per cent increase.

The number of branches increased to 6,499, while the total number of employees rose to 1.61 lakh from 1.29 lakh in the year-ago period.

Its overall capital adequacy ratio stood at 18 per cent as of September 30, 2022, which includes the core tier-I adequacy at 17.1 per cent.

The bank, which is absorbing its parent HDFC Ltd into itself in corporate India's biggest merger in history, also informed that the National Company Law Tribunal (NCLT) directed it on Friday to hold a meeting of shareholders on November 25 to seek their approval for the merger scheme.

Among the subsidiaries, HDFC Securities saw a dip in its September quarter net at Rs 190.9 crore as against Rs 239.6 crore in the year-ago period, while HDB Financial Services' profit after tax zoomed to Rs 471.4 crore from Rs 191.7 crore.

The bank scrip had closed 3.40 per cent up at Rs 1,441.10 a piece on the BSE on Friday.