HDFC Bank’s second-quarter net profit rose 4.7% to ₹19,510 crore as stronger lending income was offset by weaker treasury gains, higher taxes and a continued decline in its net interest margin.
HDFC Bank reported a subdued rise in second-quarter standalone net profit on Friday, as stronger lending income was offset by weaker treasury gains and a higher tax bill. The bank said profit after tax increased 4.7% year-on-year to ₹19,510 crore for the September quarter, compared with ₹18,641 crore a year earlier, while net interest income climbed almost 10% to ₹34,619 crore. Reuters-style earnings coverage by Business Standard and Moneycontrol said the result broadly matched market expectations, with analysts watching margins and the pace of deposit growth closely.
The lender’s other income slipped 4% to ₹13,831 crore, reflecting a sharp drop in treasury trading gains to ₹780 crore from ₹2,390 crore a year earlier, according to the company’s reported figures. Provisions rose 2% to ₹3,574 crore and tax expense increased 11% to ₹6,400 crore, which helped keep profit growth below the pace of core income expansion. Chief financial officer Srinivasan Vaidyanathan said the bank had faced “certain constraints and certain choices” over the past two quarters and that it would take “a couple of more quarters” to rebuild the net interest margin, which eased to 3.16% from 3.27% a year earlier.
Asset quality improved over the year, with gross non-performing assets falling to 1.11% of gross advances from 1.24% a year earlier, while net NPAs eased to 0.37% from 0.42%. Livemint and Economic Times reported that the bank’s gross bad loans also edged down sequentially from the June quarter, suggesting a steady credit profile despite the softer margin trend.
Growth in the balance sheet remained firm. Total deposits rose 19% to ₹33,27,449 crore, while advances increased 16% to ₹32,19,500 crore, supported by a 12% rise in retail loans, 23% growth in small and mid-market enterprise lending and a 16% increase in corporate and other wholesale advances, according to the bank’s results and Business Standard’s report. One pressure point was the mix of deposits: low-cost current account and savings account balances accounted for 31.6% of total deposits at the end of September, down from 33.9% a year earlier.
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