HDFC Bank reported a 4.7% increase in quarterly standalone profit as strong loan and deposit growth offset weaker treasury income and higher provisions.
India’s largest private-sector lender earned 195.10 billion rupees, approximately $2.05 billion, during the quarter ended September 30. The result was slightly below the 195.26 billion rupees expected by analysts surveyed by LSEG.
Net interest income increased 9.7% from a year earlier to 346.19 billion rupees.
The bank’s loan book expanded 16.3%, while deposits increased 18.8%, leaving its credit-to-deposit ratio at 96%.
Asset quality also improved modestly. Gross non-performing assets declined to 1.11% of loans from 1.17% during the previous quarter.
Pressure emerged elsewhere in the income statement.
Treasury trading gains dropped to 7.8 billion rupees from 23.9 billion rupees a year earlier, while provisions for bad loans increased 2.1%.
The results provide another indication that Indian credit demand remains strong, but they also demonstrate that rapid balance-sheet expansion does not necessarily translate into equivalent profit growth.
HDFC also faces a leadership transition, with Deputy Managing Director Kaizad Bharucha scheduled to leave at the end of December.
For investors, the next questions are whether loan growth can remain near current levels, whether deposit expansion continues keeping pace and whether weaker treasury income restrains earnings in coming quarters.
