Private sector major HDFC Bank on Wednesday reported a 2 per cent year-on-year (y-o-y) rise and 0.5 per cent quarter-on-quarter (q-o-q) fall in net profit for the quarter that ended December at ₹16,740 crore.
The bank’s net interest income (NII) grew 2 per cent on q-o-q to ₹30,650 crore, while net interest margin was at 3.43 per cent as against 3.5 per cent last quarter. Other income rose 3 per cent y-o-y and was flat q-o-q at ₹11,500 crore.
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Asset quality
HDFC Bank’s asset quality worsened slightly, with gross and net non-performing asset (GNPA, NNPA) ratio rising to 1.42 per cent and 0.46 per cent in Q3 from 1.36 per cent and 0.41 per cent the previous quarter, respectively.
“Other than seasonal agriculture slippages, the overall portfolio is strong positioned both from a GNPA point of view, and with slippages and credit cost remaining flat,” said Srinivasan Vaidyanathan, CFO, HDFC Bank.
“We arguably have the largest market share in unsecured book between cards and personal loans. Those books are pretty stable and strong at aggregate level...there is no particular blip in credit cost numbers...,” he said.
Core business
The private lender’s overall deposits outpaced credit significantly in Q3, a trend that will continue, as the lender aims to lower its credit-deposit ratio to the traditional range of 85-90 per cent over a period of time. The bank conducted loan sell down to the tune of ₹20,000 crore in Q3 and around ₹45,000 crore of sell down over 9MFY25 period, said the CFO.
Deposits of the bank rose 16 per cent y-o-y and 3 per cent q-o-q at ₹25.63 lakh crore, while overall advances rose 6 per cent y-o-y and 2 per cent q-o-q to ₹26.83 lakh crore. While retail loans grew 10 per cent y-o-y to ₹13.42 lakh crore as on December end, corporate loans de-grew 10 per cent y-o-y to ₹4.80 lakh crore.
Overall, the bank’s strategy is to maintain the pace of deposit growth, while simultaneously growing loan book at lower-than-industry average in FY25, on a par with industry growth in the next fiscal and over the industry-level growth in FY27.