HDFC Bank Q2 net profit rises 20.1% even as bad loans surge: Key takeaways

Private sector lender HDFC Bank on Tuesday reported a 20.1 per cent year-on-year rise in Q2 net profit at Rs 4,151 crore.

Here are the key takeaways from HDFC Bank's September quarter earnings.

Net Profit

The bank reported Rs 3,455 crore in net profit for the quarter ending September last year. During the first quarter of this fiscal, the lender logged Rs 3,893 crore in net profit.

Total Income

Its total income rose to Rs 23,276.2 crore in Q2 against Rs 19,970.9 crore reported in the corresponding quarter of last fiscal.  Profit before tax for the quarter was up 20.2 percent to Rs 6,341.7 crore.

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Net interest income

Net interest income (NII) rose by 22 percent to Rs 9,752.1 crore from Rs 7,993.6 crore for the quarter ended September 30, 2016 aided by 17.6 percent growth in average assets and a core net interest margin for the quarter of 4.3 percent. Net interest income (NII) is the difference between revenues generated by interest-bearing assets and the cost of servicing (interest-burdened) liabilities.

Operating expenses

Operating expenses rose by 13.8 percent to Rs 5,540.1 crore in Q2 from Rs 4,870 crore during the corresponding quarter of the previous year.

Provisions and contingencies

The key balance sheet figure rose to Rs 1,476.2 crore in Q2 against Rs 749 crore in the corresponding quarter of the previous fiscal.

Capital adequacy ratio

The bank's total capital adequacy ratio (CAR) as per Basel III guidelines, was at 15.1 per cent as against 15.4 per cent at the end of second quarter of the previous fiscal.

NPAs

Its gross non-performing assets (GNPAs) rose to 1.26 per cent of gross advances from 1.02 per cent a year ago. The net NPAs also increased to 0.4 per cent from 0.3 per cent.

Stock

Meanwhile, the HDFC Bank stock closed 0.23 percent or 4 points higher at 1,867 level on the BSE. The stock is up over 55 percent since the beginning of 2017.