HDFC Bank reported an 18.17% year-on-year (Y-o-Y) increase in its net profit for the first quarter of FY2019 at Rs 4,601.44 crore, but missed analysts’ expectations due to an increase in provisions. According to Bloomberg estimates, analysts were expecting a net profit of Rs 4,786 crore. The bank’s net profit fell 4.12% from Rs 4,799.28 crore in the previous quarter. In a statement to the stock exchanges, the bank said its provisions increased 4.5% in the April-June quarter to Rs 1,629.37 crore. On a sequential basis, provision rose 5.7%. The loan loss provision during the quarter was Rs 1,432.2 crore, compared with Rs 1,343.2 crore in the year-ago period.
HDFC Bank has also provided for the entire mark-to-market loss of Rs 391 crore on its corporate bond portfolio in the first quarter, although the Reserve Bank of India had granted banks an option to spread the provisioning on mark-to-market losses on investments held in the available for sale (AFS) and held for trading (HTF) categories. The bank said its net interest income, or the difference between interest earned and interest expended, grew 15.40% from the year-ago period to Rs 10,813.60 crore. On a sequential basis, the net interest income grew 1.46%. HDFC Bank’s gross non-performing assets (NPAs) ratio stood at 1.33% for the April-June quarter against 1.24% in the year-ago period and 1.30% in the previous quarter.
The net NPA ratio was 0.41% during the quarter, compared with 0.44% in the year-ago period and 0.40% in the previous quarter. The bank’s total capital adequacy ratio (CAR) as per Basel III guidelines was at 14.6% at the end of the quarter, compared with 15.6% a year ago. Its total advances as of June 30 grew by 22% YoY to Rs 708,649 crore. Total deposits as of June 30 were Rs 805,785 crore, an increase of 20% over the year-ago period.