Beating estimates, India’s largest private bank clocks 20% higher profit

Both the Net interest income and income from other sources saw double-digit growth with interest income increasing by 18.9% to Rs. 210.21 billion and income from other sources increasing by 16.7% due to improvements in earnings from fees and commission and the foreign exchange and derivatives revenue also improved.

HDFC bank saw a high pace of growth in all segments including commercial, retail, rural banking and even in corporate and wholesale loans. The advances of the bank also saw good growth of 23.4%.

Compared to other commercial banks where deposit growth is around 9.2%, HDFC bank saw higher growth in deposits, which grew at 19% with an uptick in both time deposits and current and savings account deposits.

The core interest margin, which is an important indicator of the bank’s profitability, was 4.3% for HDFC Bank. The bank is also well-capitalized with a capital adequacy ratio of 18%.

The asset quality of the bank is also improving with gross non-performing assets (NPAs) at 1.23%, lower than 1.28% in the June quarter, the Net NPAs were also down by around 2% during the same period.

Total provisions of banks were slightly higher at Rs. 32.4 billion in the September quarter. During the previous quarter, total provisions were at Rs. 31.87 billion

The Reserve Bank of India (RBI) informed that as on 23 September, India’s loan growth was at a multi-quarter high at 16.4% year on year. The rating agency Care Ratings claim that a low base, higher retail credit, and increased demand for working capital requirement amidst high inflation has helped credit growth to pick up.

With inputs from Reuters.