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HDFC Bank Q3 profit rises 33% to Rs 7,416 crore, bad loans grow

HDFC Bank Q3 profit: Net interest income (NII), the difference between interest earned and interest paid, for Q3 FY20 increased 19.9 per cent to Rs 14,173 crore on the back of growth in advances

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HDFC Bank Q3 profit rises 33% to Rs 7,416 crore, bad loans grow
HDFC Bank Q3 profit increased on the back of higher net interest income

HDFC Bank reported a 32.8 per cent increase in its net profit for the quarter ended December 31, 2019. The private lender posted a consolidated net profit of Rs 7,416.5 crore in the third quarter of this fiscal, as opposed to Rs 5,585.8 crore in the corresponding quarter last fiscal.

Net interest income (NII), the difference between interest earned and interest paid, for Q3 FY20 increased 19.9 per cent to Rs 14,173 crore on the back of growth in advances. The bank had registered NII of Rs 12,577 crore in Q3 FY19, HDFC Bank reported in a regulatory filing. The net interest margin for the quarter under review remained stable at 4.2 per cent, it further added.

HDFC Bank's operating expenses for the December quarter this year were Rs 7,896.8 crore, following an increase of 17.5 per cent over Rs 6,7919.3 crore reported during the corresponding quarter last year. The cost-to-income ratio for the quarter came was pegged at 37.9 per cent, as opposed to 38.4 per cent in the year-ago period.

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Provisions and contingencies for Q3 FY20 increased 37.62 per cent to Rs 3,043.6 crore, as opposed to Rs 2,211.5 crore in Q3 FY19. "The specific loan loss provisions in the current quarter include one-offs of approximately Rs 700 crore, primarily relating to certain corporate accounts. Therefore, the Core Credit Cost ratio (i.e. excluding one-offs), was 0.92 per cent, as compared to 0.9 per cent in the quarter ending September 30, 2019, and 0.88 per cent in the quarter ending December 31, 2018," HDFC Bank said in its filing to the bourses.

The bank's capital adequacy ratio (CAR) was 18.5 per cent as on December 31, 2019, stated HDFC bank, as opposed to 17.3 per cent on December 31, 2018. The banks are required to maintain a CAR of 11.075 per cent.

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HDFC Bank's gross non-performing assets (NPAs) were at 1.42 per cent of gross advances as on December 31, 2019, as against 1.38 per cent in the year-ago period. Net NPAs increased to 0.48 per cent of net advances during the quarter under review, as opposed to 0.42 per cent during the corresponding quarter last fiscal.

"The bank held floating provisions of Rs 1,451 crore and contingent provisions of Rs 1,457 crore as on December 31, 2019. Total provisions were 119 per cent of the gross non-performing loans as on December 31, 2019," HDFC Bank stated.

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