India's largest private lender HDFC Bank Ltd on Friday reported a 20.1% rise in Q3 profit on higher net interest income (NII) and other income. HDFC Bank’s net profit rose to Rs4,642.60 crore for the quarter ended 31 December from Rs3,865.33 crore a year ago.
According to 17 Bloomberg analysts’ estimates, the bank was expected to post a net profit of Rs4,706.90 crore.
Net interest income, or the core income a bank earns by giving loans, increased 24.1% to Rs10,314.34 crore compared with Rs8,309.09 crore last year. Other income was at Rs3,869.17 crore, up 23.12% from Rs3,142.67 crore a year ago.
Provisions and contingencies jumped 88.81% to Rs715.78 crore from Rs115.38 crore a year ago. On quarter-on-quarter basis, it fell 8.45% from Rs1,476.19 crore. Gross non-performing assets (NPAs) advanced 57.4% to Rs8,234.88 crore at the end of the December quarter from Rs5,232.27 crore in the same quarter last year.
The rise in bad loans was due to an annual exercise conducted by the Reserve Bank of India (RBI) that pointed out divergence in asset classification for fiscal 2017.
For HDFC Bank, the divergence in gross bad loans, the difference between RBI’s assessment and that reported by the lender, stood at around Rs2,051.76 crore at end March 2017, while divergence in provisions was at Rs793.39 crore.
As a percentage of total loans, gross NPAs stood at 1.29% as compared to 1.26% in the previous quarter and 1.05% in the year-ago quarter. Net NPAs were at 0.44% in the December quarter compared to 0.43% in the previous quarter and 0.32% in the same quarter last year.
Advances rose 27.51% from a year ago to Rs6.31 trillion. Deposits rose 10.1% to Rs6.99 trillion.
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