Country's largest private sector lender HDFC Bank reported a 20% rise in net profit to Rs 4,151 crore driven by higher net interest income, other income and operating profits ploughed by a robust growth in advances.
The advances of the bank grew 22.35% over the previous year to Rs 604,867 crore, contributed by both the retail and corporate books, expanding the lender's balance-sheet to Rs 9.33 lakh crore at the end of the second quarter.
Retail loans grew 21.6% while the wholesale loans or loans to companies grew 23.6%. Retail comprises 55% of the bank's loan book while corporate loans account for the rest.
The gross NPAs stood at Rs 7,243 crore, maintaining a stable asset quality. The bank had fresh additions of Rs 2,473 crore of bad loans during the quarter. Loans worth about Rs 2,013 crore were upgraded and Rs 761 crore of loans were written off.
Lalitabh Shrivastawa, AVP - research, Sharekhan, said HDFC Bank has maintained its asset quality momentum. "Though there was a niggle relating to a single account exposure, near-term P&L (profit and loss) impact is expected to be negligible and the fact that there was no divergence reported should provide comfort. We have maintained our 'buy' rating with a revised price target of Rs 2,100."
The shares of the bank closed at Rs 1,865.15, 0.13% higher on the BSE.
The bank disclosed in a release that it had participated in a project loan (where it had a 2.3% share), which underwent flexible structuring under the 5:25 regulatory framework as approved by the joint lenders' forum (JLF) in February 2016.
"The bank is in ongoing discussions and correspondence with the regulator in relation to certain observations made on the implementation of the JLF-approved flexible structuring scheme. The conduct of this account with the bank has been standard throughout. Nevertheless, in the interim, the bank has made sufficient contingent provisions for this account as on September 30, 2017," it said in a release.
Other income (non-interest revenue) at Rs 3,605.9 crore was 27% of the net revenues for the quarter ended September 30, 2017, and grew 24.3% to Rs 2,901.0 crore year-on-year.
The bank's total income for the quarter ended September 30, 2017, was Rs 23,276.2 crore, up from Rs 19,970.9 crore for the quarter ended September 30, 2016. Net revenues (net interest income plus other income) increased 22.6% to Rs 13,358 crore in the second quarter from Rs 10,894.5 crore in the corresponding quarter of the previous year.
Net interest income (interest earned less interest expended) rose 22.0% to Rs 9,752.1 crore, driven by average asset growth of 17.6% and a core net interest margin for the quarter at 4.3%.
ADVANCES GROW
- Advances of the bank grew 22.35% over the previous year to Rs 604,867 crore
- Retail loans grew 21.6% while wholesale loans grew 23.6%
- Gross non-performing assets at Rs 7,243 crore were stable
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