Private sector lender HDFC Bank on Wednesday reported a 20.49% rise in its second quarter net profit at Rs 2,869.45 crore compared to the same period last year.
Net interest income (NII) — the difference between interest earned and interest expended — saw a 21.23% rise at Rs 6,680.90 crore on a year-on-year basis. The lender reported a 10-bps fall in net interest margins (NIMs) at 4.2% for the second quarter compared to the previous quarter.
Paresh Sukthankar, deputy managing director, attributed this fall in margins to the reduction in the base rate and the rise in fixed deposits. “We have had NIMs in a range of about 4.1% to 4.4%. In this quarter, they have come off by about 10 basis points, which is primarily linked to the drop in base rate and the extremely strong increase in fixed deposits and this is true for both June and September quarters,” Sukthankar said.
Asset quality improved with gross non-performing assets (NPAs) as a percentage of gross advances coming down by 11 bps to 0.91% compared to the corresponding period last year. Even on a sequential basis, gross NPAs came down by 4 bps.
Net NPAs improved by 3 bps at 0.25% compared to the second quarter of FY15, while on a sequential basis, it saw a fall by two basis points.
Total restructured loans were at 0.1% of the gross advances as of September 30, 2015, according to a press release.
Provisions other than tax and contingencies rose 49.44% on a y-o-y basis at Rs 681.29 crore in the second quarter this year.
“The actual increases in provisions are primarily been in the general provisions for standard assets because the loan growth has been much stronger,” Sukthankar added. Advances on the quarter end stood at Rs 4.18 lakh crore, an increase of 27.9% over September 30, 2014. Total deposits as of September 30, 2015, stood at Rs 5.06 lakh crore, an increase of 29.7% over September 30, 2014.
Operating profit witnessed a growth of 24.2% at Rs 5,042.89 crore on a y-o-y basis. The bank’s total capital adequacy ratio as per Basel-III guidelines was at 15.5% as on September 30, 2015, the release said.
The scrip closed marginally down at Rs 1,094.80 on BSE on Wednesday.