HDFC Bank's asset quality is expected to improve slightly in Q2FY25, with gross non-performing assets (GNPAs) likely to decrease compared to the previous quarter. However, provisions are expected to increase due to ageing and prudent accounting practices. In Q1FY25, the GNPA ratio rose by 9 basis points (bps) sequentially to 1.33%, leading to a decline in asset quality.
During the quarter ending June 2024, HDFC Bank reported a Net Interest Income (NII) of Rs 29,837.1 crore, representing a 26.4% increase from the same period last year. Sequentially, NII saw a 2.6% rise, primarily driven by strong advances growth.
The bank's net profit for Q1 FY25 saw a 35% year-on-year increase to Rs 16,175 crore, supported by robust NII and lower provisions. However, there was a 2% decline compared to the previous quarter.
Market analysts anticipate HDFC Bank's net interest margins (NIM) to hold steady at around 3.71% in the September quarter, in line with the previous quarter. Management is expected to provide positive insights on margin trends in the medium term.
The lender's focus on the loan-deposit ratio (LDR) has led to improvements compared to the previous quarter. The LDR is projected to reach around 100% from 103% in Q1FY25.
According to the pre-quarter update, there was a 1.3% sequential loan growth and a 5.1% deposit growth.
It is anticipated that loan growth will continue to be modest in the next quarter, while deposit growth is expected to surpass loan growth, consequently reducing the LDR levels further.
During the quarter ending in June 2024 (Q1FY25), HDFC Bank reported a Net Interest Income (NII) of ₹29,837.1 crore, showing a 26.4% increase from the same period last year. Sequentially, NII saw a 2.6% rise, mainly due to strong growth in advances.
The net profit for Q1 FY25 also saw a significant growth of 35% year-on-year, reaching ₹16,175 crore, supported by a healthy NII and lower provisions. However, compared to the previous quarter, net profit decreased by 2%.