Mumbai, April 19 (Reuters) – India’s HDFC bank beat analysts’ forecasts for January-March profits on Saturday, which helped higher net interest income and improve asset quality.
According to data compiled by LSEG, the country’s largest private lender’s independent net profit in the fiscal fourth quarter was Rs 17,616 crore (USD 2,06 billion), up from Rs 16,736 crore for analysts over the past three months and above.
The difference between net interest income, earned and paid interest increased by 4.6% to Rs 32,07 crore, with the core net profit margin rising from 3.43% of total assets to 3.54% and from 3.62% of money-making assets to 3.43%.
Excluding interest on income tax refunds worth Rs 11,700 crore, HDFC’s core net interest margin is 3.46% and 3.65% of its assets.
Mumbai’s lenders lowered their savings rate by 25 basis points after three years of shelving, and since then, central bank policies have been reduced by 50 barrels since February.
Analysts say the cut is expected to increase HDFC bank profit margins from the next quarter.
HDFC Bank’s merger with parent company HDFC in 2023 added a large amount of loans to its portfolio, but with smaller deposits, putting it under pressure to increase the rate of raising deposits or slow down loan growth.
Its deposits rose 5.9% from the previous quarter to Rs 27.15 trillion, while gross margin prepayment or approved and paid loans rose by about 4%.
HDFC Bank’s asset quality has improved, with its non-performing asset ratio dropping to 1.33% at the end of March, from 1.42% three months ago.
HDFC Bank shares rose 1.5% on Thursday ahead of Friday’s market holiday. ($1 = INR 85.4290) (Reported by Siddhi Nayak; Edited by William Mallard)
