HDFC Bank posts higher Q4 profits

- Reuters, MUMBAI

Apr 22, 2017-

HDFC Bank, India’s second-biggest lender by assets, reported a slightly better-than-expected 18.3 percent rise in fourth-quarter net profit on higher interest and fee income, while keeping its bad-loan ratio stable quarter-on-quarter.

Net profit was 39.9 billion rupees ($617.60 million) for the three months to March 31, compared with 33.74 billion rupees reported a year ago, HDFC Bank, the nation’s most valuable lender, said on Friday. Analysts, on average, had expected a net profit of 39.56 billion rupees, according to data compiled by Thomson Reuters.

Gross bad loans as a percentage of total loans, at 1.05 percent, were little changed from end-December, although higher than 0.94 percent a year earlier. Provisions, including for loan losses, jumped, however.

Loan-loss provisions were 9.78 billion rupees in the March quarter, nearly doubling from 4.9 billion rupees a year earlier, as the bank accounted for loan defaults that were not recognised as such in the December quarter after the central bank temporarily relaxed rules to help businesses weather a shock banknote ban.

Banks are also recovering from the government ban of high-value banknotes in November that hit their usual business as they scrambled to exchange older notes, and also weakened credit demand.

The government and the sector regulator are also tightening rules around recognition and resolution of bad loans. HDFC Bank, with its stronger retail business and relatively smaller exposure to project finance, has far lower bad loans than its bigger rivals and has been an investor favourite.

Published: 22-04-2017 09:10

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