UPDATE 1-HDFC Bank, India’s largest private lender, reports 20% rise in profit

(Updated with some additional details)

By Nupur Anand

MUMBAI, Oct 15 (Reuters) – HDFC Bank, India’s biggest private lender, on Saturday reported a 20% rise in net profit in the September quarter of this fiscal year, buoyed by higher loan growth and a increase in other income.

Net profit reached 106.05 billion rupees, beating estimates. Analysts had expected a profit of 105.97 billion rupees, according to Refinitiv IBES data.

Net interest income, the difference between interest earned and interest paid, was 210.21 billion rupees, a jump of 18.9%.

Other income increased by 16.7% thanks to the improvement in fees and commissions and the improvement in foreign exchange and derivatives income.

Advances rose 23.4% as the bank saw a high pace of growth across all segments, including retail, commercial and rural banking and even corporate and wholesale lending.

Within personal loans, advances on two-wheelers saw a slight decline with total advances in the segment at 95.97 billion rupees against 97.13 billion rupees a year ago.

Deposits grew by 19%, which is significantly higher than the growth of the whole sector, with an increase observed in both time deposits and deposits in current and savings accounts.

Loan growth in India hit a multi-quarter high of 16.4% year-on-year as of September 23, according to central bank data. A weak base, higher retail credit, increased demand for working capital amid high inflation helped credit growth pick up, Care Ratings said.

Meanwhile, industry filing growth remained relatively weak at 9.2%, according to the latest data.

HDFC Bank’s core net interest margin, a key indicator of the bank’s profitability, was 4.3%.

The lender’s asset quality also improved sequentially with gross non-performing assets at 1.23% from 1.28% in the June quarter. Net NPAs also improved and fell by 2 basis points over the same period.

Total provisions increased slightly to 32.40 billion rupees in the September quarter from 31.87 billion rupees in the June quarter.

The bank’s total cost of credit ratio was 0.87%, down from 1.30% for the quarter ending September 2021.

The bank remains well capitalized with an equity ratio of 18%. (Reporting by Nupur Anand; Editing by Michael Perry)

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