NEW DELHI: India's second-largest public sector lender HDFC Bank reported a robust 26.7 per cent year-on-year (y-o-y) increase in its second-quarter earnings on Saturday, recording a net profit of Rs 6,345 crore for the period against Rs 5,005.73 crore for the corresponding quarter of the previous year. A perusal of the bank's balance sheets filed with stock exchanges shows that this growth in profitability has been driven primarily by a significant growth in the bank's assets by 15 per cent, complemented by a solid 4.2 per cent core net interest margin. Most of the bank's other operational metrics also indicate positive momentum, with net interest income during the quarter growing by 14.89 per cent to Rs 13,515.04 crore y-o-y and loan growth clocking in at 19.5 per cent.
"The bank's total income for the quarter ended September 30, 2019 at Rs 33,755.0 crore grew by 19.6 per cent from Rs 28,215.2 crore for the quarter ended September 30, 2018. Net revenues (net interest income plus other income) increased by 21.1 per cent to Rs 19,103.8 crore for the quarter ended September 30, 2019 from Rs 15,779.0 crore in the corresponding quarter of the previous year," it said.
However, while the bank's asset quality remained stable for the quarter, it had recorded a substantial increase in provisioning. HDFC Bank recorded gross non-performing assets (GNPA) falling sequentially to 1.38 per cent of gross advances from 1.40 per cent, and net NPA declining to 0.42 per cent against 0.43 per cent compared to the previous quarter.
"Provisions and contingencies for the quarter were Rs 2,700.7 crore (consisting of specific loan loss provisions of Rs 2,038.0 crore and general provisions and other provisions of Rs 662. 7 crore) as against Rs 1,820.0 crore for the quarter ended September 30, 2018," HDFC Bank said. The bank also saw non-interest income shoot up by 39 per cent to Rs 5,588.72 crore in the July-September quarter, with fees and commissions, which contribute more than 70 per cent to other income, growing by 23 per cent year-on-year to Rs 4,054.5 crore.
Its asset quality is stable
The bank's asset quality remained stable for the quarter, however it had recorded a substantial increase in provisioning. HDFC Bank recorded gross non-performing assets falling sequentially to 1.38 per cent of gross advances from 1.40 per cent, and net NPA declining to 0.42 per cent against 0.43 per cent compared to previous quarter