MUMBAI: HDFC Bank has reported a street-beating set of numbers with net income rising 5 percent on-year to Rs 16,821 crore, despite the overall stressed assets inching up marginally.
The numbers beat Street expectations as brokerages were expecting the largest private sector lender to post Rs 16,570 crore in net income in the September quarter. The bank has also posted better-than-expected net interest income.
The core net interest income rose a Street-beating 10 percent to Rs 30,114 crore as against brokerages expectations of Rs 30,306 crore. The core profitability gauge, net interest margin printed in at 3.46 percent and 3.65 percent based on interest earning assets, the chief financial officer Srinivasan Kothandaraman Vaidyanathan told reporters in an earnings call Saturday.
Other income for the quarter came in at Rs 11,480 crore compared to Rs 10,710 crore year-ago.
Gross non-performing assets stood at 1.36 percent, marginally higher than 1.33 percent in the preceding quarter, while net NPAs stood at 0.41 percent, up from 0.39 percent on-quarter. In absolute terms, gross NPAs rose to Rs 34,251 crore from Rs 33,026 crore, while net NPAs climbed to Rs 10,309 crore from Rs 9,508 crore on-quarter.
Provisions for the quarter rose to Rs 2,701 crore, rising 4 percent from Rs 2,602 on-quarter, Vaidyanathan said.
In the reporting quarter, gross advances rose 7 percent to Rs 25.19 trillion, and the chief financial officer refused to offer a guidance on any key numbers but said "we are focused growth at any cost but only quality growth. Asset quality is the core driver behind our growth."
Retail loans grew 11.3 percent and commercial and corporate book clipped at 17.4 percent, Vaidyanathan said, adding however, corporate and other wholesale loans were lower by 12 percent. In fact wholesale book degrew 2 percent and Vaidyanathan attributed the same to price mismatches.
Overseas advances constituted 1.7 percent of the total advances of the nation’s second largest lender with a balance sheet of over Rs 30 trillion.
Advances on an average basis were Rs 25.64 trillion in the reporting quarter compared to Rs 23.27 trillion a year ago, and Rs 25.33 trillion in the previous quarter.
Total deposits grew 15.1 percent on-year to Rs 25.08 trillion—for the first time crossing the Rs 25-trillion-mark, Vaidyanathan said. Of the total liabilities, current and savings account fetched 8.1 percent more funds, with savings at Rs 6.08 trillion and current account deposits at Rs 2.75 trillion.
Time deposits were at Rs 16.17 trillion, up 19.3 percent over the same quarter last year. The low cost Casa deposits comprise 35.3 percent of the total deposits.
Vaidyanathan said, with such growth the objective of bringing the credit to deposit ratio to 80-85 percent looks on target.
On asset quality front, he said there is no stress in any of the segments, especially on the retail and agri side.
However, the bank saw its slippage ratio going up by 31 bps in the quarter but the finance head there is nothing that needs immediate attention.
On the slower rate of loan sales, Vaidyanathan said this has been as planned, especially the unsecured book side. Putting it in perspective, he said in FY23 their unsecured book had clipped at 19 percent while the industry was growing at 29 percent. The numbers came down to 10 percent and 24 percent respectively in FY24. And now the bank is at 8-9 percent and the industry must be around double that level.
On the home loan side, where its erstwhile parent HDFC was the largest player till two years before the merger in July 2023, he said the mortgage book has been consistently growing at around 11.7-12 percent on annualized basis and has touched Rs 8.08 trillion as of end September.
"On average we book around Rs 40,000 crore worth of home loans every quarter," Vaidyanathan told The New Indian Express, adding "there is absolutely no issue with the asset quality on the ritual mortgage book at all."
The shares of the bank, which has been struggling since the merger closed at Rs 1,681.15 last Friday, gaining 0.47 percent on the BSE.