Asset quality was stable as gross NPAs stood flat at 1.33 percent sequentially. Net NPA fell to 0.4 percent in Q2 as against 0.41 percent in the June quarter.
HDFC Bank, the country's second largest private sector lender, has reported a healthy 20.6 percent year-on-year growth in Q2 FY19 profit to Rs 5,005.73 crore, driven by net interest income (NII), other income and operating income. However, higher provisions limited the bank's profitability.
Profit in year-ago period stood at Rs 4,151 crore.
NII, the difference between interest earned and interest expended, grew 20.6 percent to Rs 11,763.41 crore compared to the same quarter last year. "NII growth was driven by average asset growth of 22.9 percent and a net interest margin of 4.3 percent," the bank said.
Loan book grew 24.1 percent YoY to Rs 7.50 lakh crore, while deposits growth was 20.9 percent at Rs 8.33 lakh crore in the September quarter.
HDFC Bank said current account-savings account (CASA) deposits, which contributed 42 percent to total deposits, grew at 18.3 percent, with savings and current account deposits rose 18.7 percent and 17.7 percent, respectively. "The focus on deposits has helped us maintain liquidity coverage ratio at 118 percent, much above the regulatory requirement," the bank said in an exchange filing.
Asset quality was stable as gross non-performing assets (NPAs) stood flat at 1.33 percent sequentially. Net NPA fell to 0.4 percent in Q2 as against 0.41 percent in the June quarter.
In absolute terms, gross NPAs were up 5.9 percent quarter-on-quarter at Rs 10,097.73 crore and net NPAs rose 4.2 percent to Rs 3,028.24 crore.
Provisions and contingencies increased 11.7 percent QoQ and 23.3 percent YoY to Rs 1,819.96 crore.
Other income, which is also called non-interest income, grew 11.4 percent during the quarter gone by to Rs 4,015.6 crore driven by fee income. "Fees and commission income grew 26.1 percent at Rs 3,295.6 crore and constituted 82.1 percent of other income," the bank said.
Cost-to-income ratio improved to 39.9 percent against 41.5 percent YoY. Operating profit rose 21.3 percent to Rs 9,479.95 crore.
The HDFC Bank stock corrected nearly 5 percent during the quarter ended September 2018 and has rallied 5 percent year-to-date.
