Q1 performance: HDFC Bank profit up 16.1% to Rs 7,730 crore

HDFC Bank profit up 16.1% to Rs 7,730 crores

The largest private lender HDFC Bank on Saturday posted lower than the estimated net profit of Rs. 7,730 crore during the June quarter, owing to disruptions due to Covid-19, as the asset quality of the bank worsened. Q1 performance: HDFC Bank profit up 16.1% to Rs 7,730 crore

Even though the net profit of the bank registered a 16.1% year-on-year (y-o-y) growth, the bottom line missed the Rs. 7,931-crore consensus estimate by Bloomberg. The net interest income (NII) of the lender, however, grew 9% y-o-y to Rs. 17,009 crore but remained flat sequentially.

The bank has acknowledged that due to Covid-19 disruptions, a decrease in retail loan origination, sale of third-party products, card spends and efficiency in collection efforts was seen. The lower business volumes, coupled with higher slippages, resulted in lower revenues, as well as an enhanced level of provisioning.

The asset quality of the lender worsened during the June quarter. The gross non-performing assets (NPAs) ratio of the lender declined 8 bps (basis points) to 0.48%, compared to gross NPAs of 0.4% in the previous quarter. The total credit cost ratio remained at 1.67%, compared to 1.64% in the March quarter and 1.54% in the quarter ending June 30, 2020.

The bank’s total capital adequacy ratio (CAR) as per Basel III guidelines was at 19.1% as of June 30 against a regulatory requirement of 11.075%.

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