HDFC Bank Q2 Results: Profit Rises 18%, Asset Quality Improves

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HDFC Bank Ltd.’s quarterly profit rose as as regulatory dispensations kept any Covid-19-related asset quality stress at bay.

Net profit of India’s largest private lender rose 18% year-on-year to Rs 7,513 crore in the quarter ended September, according to an exchange filing. That compares with the Rs 6,409-crore consensus estimate of analysts tracked by Bloomberg.

Net interest income, or the bank’s core income, rose 17% year-on-year to Rs 15,776 crore. Analysts had pegged the metric at Rs 12,274 crore. Other income rose 9% year-on-year to Rs 6,092.5 crore.

The September quarter will be the last under the leadership of long-time Chief Executive Officer Aditya Puri, who will step down by October-end.

Asset Quality

The bank’s asset quality improved with the gross non-performing asset ratio at 1.08% at the end of the second quarter, as compared with 1.36% as on June 30. Net NPA ratio for the bank fell 16 basis points to 0.17%.

Banks were permitted to offer a moratorium to borrowers until the end of August to tide over stress brought on by the Covid-19 pandemic. Thereafter, starting September, the Reserve Bank of India has permitted one-time restructuring of advances of companies and retail borrowers hit by the Covid-19 outbreak. While these assets don’t have to be marked as NPAs, banks have been asked to disclose details of restructured assets.

HDFC Bank reported total provisions worth Rs 3,704 crore, higher than the Rs 2,700 crore reported last year. As on June 30, the private bank had reported provisions worth Rs 3,891 crore.

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