HDFC Bank posted lower-than-expected growth in its net profit impacted by higher provisions. The net profit grew by 37% year-on-year and 0.84% quarter-on-quarter to Rs 16,512 crore in the fourth quarter of 2023-24, dented by floating provisions worth Rs 10,900 crore made in January-March period. Bloomberg analysts expected the bank to post Rs 17,593 crore net profit in the fourth quarter.

“This floating provision is not in anticipation of any event as such. We felt this is an opportune time to make countercyclical provisions,” said Srinivasan Vaidyanathan, chief financial officer, HDFC Bank, in a post-earnings call. He declined to give any guidance on net interest margin and credit growth for the current fiscal.

Net interest income, the difference between interest earned and paid, rose 24.5 % to Rs 29,080 crore in the fourth quarter of 2023-24 from Rs 23,350 crore in the same quarter of the previous fiscal. Other income increased 63% to Rs 18,166 crore during the quarter.

The numbers are not strictly comparable on a year-on-year basis as a result of the merger of HDFC Bank with mortgage lender HDFC that came into effect from July 2023.

The net interest margin of the lender remained stable at 3.6% in the fourth quarter, which was the same level as in the third quarter. The bank managed to improve its current account-savings account (CASA) ratio sequentially, which increased to 38.2% in the fourth quarter from 37.7% in the third quarter.

The private lender witnessed healthy loan growth as its total advances increased by 55% year-on-year to Rs 24.84 trillion as of March-end, while total deposits grew 26% to Rs 23.79 trillion.

The bank witnessed a slight deterioration in its asset quality as its gross non-performing assets came at 1.24% of gross advances as on March 31, as against 1.26% as on December 31, 2023, and 1.12% as on March 31, 2023. Provisions during the quarter rose three times quarter-on-quarter to Rs 13,512 crore.

The bank announced that its board of directors recommended a dividend of Rs 19.5 per equity share of Re 1 for the year ended March 31. During the last quarter, the bank’s net revenue surged to Rs 47,240 crore, inclusive of transaction gains of Rs 7,341 crore from the stake sale in subsidiary HDFC Credila Financial Services during the quarter.