HDFC Bank on Monday reported a 20.1 per cent rise in the October-December quarter net profit at Rs3,358.8 crore on higher core interest income as the second largest private lender said it is untouched by the regulator’s special review on big-ticket bad assets.
The core net interest income rose 24 per cent to Rs7,068.5 crore in the October-December quarter, helped by asset growth of 28.2 per cent and an almost 0.10 per cent expansion in the net interest margin to 4.3 per cent, the bank said.
Other income rose at lower pace of 13.3 per cent to Rs2,872.2 crore, with the core fee and commission incomes rising to Rs2,004.8 crore from Rs1,806.5 crore a year ago.
Unlike its peer Axis Bank, which witnessed a surge in bad assets following the RBI review of top 150 stressed assets, and others which are widely expected to show similar trends, HDFC Bank ducked the pressure with zero exposure to the list.
“We have not had any non-performing loans recognition issues (from the RBI’s new list of top defaulters),” Deputy Managing Director Paresh Sukthankar told reporters.
It may be recalled that HDFC Bank was the first to declare Essar Steel account as an NPA in the first quarter of this fiscal itself and make full provisions for the same.
However, Sukthankar did not name the company, saying as a policy it does not disclose client specific details.
The bank reportedly had Rs550 crore exposure to the company, which owes a whopping Rs30,000 crore to 24 lenders, and has sold the NPA to ARCs at a hefty discount in April.
Sukthankar said there has been an increase of 0.06 per cent in the gross non-performing assets ratio to 0.97 per cent. He attributed this to slippages from the agri-banking and small businesses fronts, apart from a regulatory change in computation of credit card outstanding.
This has its overall provisions inching up to Rs653.88 crore from Rs560.43 crore a year ago. There was no sale of assets to ARCs during the quarter either, he said, adding the bank’s overall restructured advances stood at 0.1 per cent of the Rs4,36,364 crore loan book.