HDFC Bank profit climbs 18.2%

Q1 net rises to ₹4,601.4 cr.; net interest income increases by 15% on asset growth

HDFC Bank, the second largest private sector lender, reported an 18.2% increase in net profit to ₹4,601.4 crore for the quarter ended June 30, 2018.

Net interest income — interest earned less interest expended — grew by 15% to ₹10,813.6 crore, driven by asset growth and a net interest margin of 4.2% for the quarter, the bank said in a statement. The growth in other income was muted at ₹3,818 crore from ₹3,516 crore reported during the same period of the previous year.

Dispensation unutilised

The lender did not avail the dispensation provided by the Reserve Bank of India (RBI) for spreading the bond losses in four quarters. Instead, it decided to provide the entire mark-to-market loss of ₹391 crore during the April-June quarter.

Provisions and contingencies for the quarter were ₹1,629.4 crore as against ₹1,558.8 crore, of which loan loss provisions were ₹1,432.2 crore as compared with ₹1,343.2 crore. The bank’s gross non-performing asset ratio was at 1.33% of gross advances as on June 30, 2018, as against 1.30% on March 31, 2018 and 1.24% as on June 30, 2017. In absolute terms, gross NPA rose to ₹9,538 crore from ₹7,242 crore reported in the year earlier period. The bank’s provision coverage rate was at 70%.

Total deposits of the bank went up by 20% year-on -year, with the proportion of current and savings account deposit or the low-cost deposits at 41.7% of the total deposits. Advances grew 22% year on year, of which retail loans grew by 21.6% and corporate loans by 22.7%. Wholesale loans comprise 45% of the total loan book.

The bank’s total Capital Adequacy Ratio (CAR) as per Basel III guidelines was at 14.6% as on June 30, 2018 as compared to 15.6% as on June 30, 2017.

The bank’s board had approved raising funds up to ₹24,000 crore, of which ₹8,500 crore was from parent HDFC and the balance through the issuance of equity shares/ convertible securities/ depository receipts pursuant to a Qualified Institutions Placement (QIP)/ American Depository Receipts (ADR)/ Global Depository Receipt (GDR) programme.

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