HDFC Bank of India reported third-quarter profit on Wednesday that met analysts’ expectations, thanks to an increase in net interest income (NII).
The country’s largest private lender recorded a standalone net profit of $1.94 billion for the quarter ended Dec. 31, a slight decrease from the previous quarter. Analysts had predicted a profit of $1.94 billion on average, according to LSEG data.
The bank’s results cannot be compared on a year-over-year basis due to its merger with parent company HDFC in July 2023.
HDFC Bank’s NII increased 2% from the previous quarter to $4.2 billion, according to Reuters calculations. Deposits also saw a 4.2% rise to $24.53 trillion, slightly slower than the previous quarter’s 5.1% growth.
Gross advances increased by 0.9% to $25.43 trillion, a slower growth rate compared to the previous quarter. The merger with HDFC added more loans to the bank’s portfolio than deposits, prompting the need to increase deposit growth or slow loan growth.
In recent months, HDFC Bank has offered retail loans for sale to reduce its loan-to-deposit ratio and ensure sufficient liquidity for loan growth. The bank’s provisions for bad loans and other contingencies increased by 17% sequentially to $31.54 billion.
The gross non-performing assets ratio was 1.42% at the end of December, compared to 1.36% in the previous quarter. Despite trading slightly lower ahead of the results, the bank’s shares were up 1% after the announcement.
Reuters
