HDFC Bank Q3 profit up 25% at Rs 2326 cr, NPA situation stable

HDFC Bank, India’s second biggest lender by market value, has reported a stable earnings for October-December as the bank managed to maintain its asset quality despite a slowing economy, helping its shares recover from day’s lows.

The banks has reported a 25 percent rise in net profit to Rs 2,326 crore, in line with the a CNBC-TV18 poll estimate of Rs 2,324 crore. Its net interest income, the difference between the amount a bank gives away as interest and the amount it receives as interest, stood at Rs 4,635 crore, up 22 percent, as against the estimate of Rs 4,723 crore.

The banks’ net interest margin, a gauge of profitability, stood at 4.2 percent as against 4.3 percent a quarter ago. Other income was 11.4 percent up on year at Rs 2,148.3 crore.

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The bank’s total expenses stood at Rs 8,850.1 crore during the quarter, up 15 percent on year, due to higher other operating expenses.

The bank’s gross NPA ratio stood at 1 percent as against 1.1 percent in the quarter ago. Net NPA, meanwhile, remain unchanged at 0.3 percent. Gross NPA in absolute terms was Rs 3,018 crore compared with Rs 2,942 crore in the previous quarter. Net NPA was Rs 797.3 crore compared with Rs 767.2 crore.

Its provisions were at Rs 389 crore, flat on quarter and lower than Rs 405 crore registered a year ago.

Capital adequacy ratio (Basel III) stood at 14.7 percent against 14.6 percent as of 30 September 2013.

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Its cost-to-income ratio stood at 42.7 percent Vs 47.2 percent a year ago.

The bank’s savings account deposits grew 15.6 percent during the quarter to Rs 94,705 crore and total deposits were up 22.9 percent at Rs 3.49 lakh crore.

Its restructured loans at 0.2% of gross advances as on December 31.

Reacting to the bank’s results analysts on CNBC-TV18 said the earnings were in line with their expectations.

Vaibhav Agarwal of Angel Broking told the TV channel that the quarter looks quite stable for the bank. He sees a 7-10 percent upside for the stock over the next 12 months. HDFC Bank is a decent stock to hold, he said.