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HDFC Bank posts record profit of Rs 4151 crore in Q2, bad loans largely stable

HDFC Bank has the lowest bad-loan ratio among top Indian lenders.

business Updated: Oct 24, 2017 14:40 IST
HDFC Bank,Indian Rupee,Net profit
The headquarters of HDFC bank iin Mumbai, December 4, 2015. (Reuters File Photo)

HDFC Bank Ltd, India’s second-biggest lender by assets, on Tuesday reported a record quarterly profit, buoyed by an increase in interest and fee incomes.

The Mumbai-based bank, which was recently added to the central bank’s list of lenders it considers “too big to fail”, raked in a net profit of Rs 4,151 crore ($634 million) in the three months to Sept. 30, up 20% from a year ago.

That was mostly in line with an average estimate of Rs 4161 crore from 24 analysts, Thomson Reuters data shows.

Gross bad loans as a percentage of total loans stood at 1.26% at end-September, versus 1.24% in the previous quarter and 1.02% a year ago.

With its focus on retail clients and relatively smaller exposure to segments such as infrastructure financing, HDFC Bank has the lowest bad-loan ratio among top Indian lenders. That has made it an investor favourite in a sector that has been marred by a record $146 billion of soured loans.

HDFC Bank’s net interest income rose 22% in the quarter on a 22.3% rise in loans.

Non-interest revenue rose 24.3%, while core net interest margin steadied at 4.3%.

The bank has a market capitalisation of more than $87 billion, making it the most valuable in the sector and second among all Indian companies.

Shares of the bank were little changed after the results in a Mumbai market that was up 0.3%.

It has rallied about 55% this year, outperforming the sector index that has risen 33% and the main market index that has added 24%.

First Published: Oct 24, 2017 14:10 IST