HDFC Bank on Wednesday announced a 2 per cent year-on-year increase in net profit to Rs 16,736 crore for the December quarter due to higher non-performing loans and slower growth in advances. Profits were in line with analyst forecasts.
Private banks’ net interest margin remained unchanged at 3.43% in the third quarter from 3.46% in the September quarter. Lenders’ net interest income, or the difference between interest earned and interest paid, rose 8% year-on-year to Rs 30,650 crore.
After the results were announced, the bank’s share price rose 1.4% to close at 1,665 rupees a share on the Bombay Stock Exchange.
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HDFC Bank Chief Financial Officer Srinivasan Vaidyanathan said in a post-earnings conference call that the bank aims to increase deposits rather than advances. “Our effort is to grow deposits faster than credit in FY26,” Vaidyanathan said.
The total non-performing asset ratio rose from 1.36% in September to 1.42% as of the end of December, deteriorating asset quality. Net NPA ratio rose from 0.41% to 0.46%. Slippage for the quarter increased to Rs 8,800 crore in the third quarter from Rs 7,800 crore in the September quarter.
The private finance company saw gross advances rise 3% year-on-year to Rs 25.43 billion as of the quarter ended December, with a marginal increase in loan volumes. Personal loans rose 10%, and commercial and local bank account balances rose nearly 12%. Corporate and other wholesale loans declined more than 10%.
HDFC Bank is looking to reduce its personal loan portfolio to improve its credit deposit ratio, which rose after its merger with Housing Development Finance Corporation in 2023.
The private lender saw a significant increase in deposits during the quarter. Total deposits increased by 16% to Rs 25.64 billion as of end-December 2024. The bank’s current account and savings account (CASA) ratio fell to 34% from 38% in the same period last year.
Management did not announce a clear schedule for the launch of HDB Financial Services’ IPO. Vaidyanathan said lenders are in a position to take the next step if they get approval. “I cannot give a specific timeline as it requires various regulatory approvals,” he said.
HDB Financials filed a draft prospectus with the Securities and Exchange Board of India in October to raise up to Rs 12,500 crore through an initial public offering.
