Business Companies 21 Jul 2018 HDFC Bank net profit ...

HDFC Bank net profit misses estimates on higher provisions

PTI
Published Jul 21, 2018, 6:20 pm IST
Updated Jul 21, 2018, 6:20 pm IST
Net interest income rose 15.4 per cent from a year earlier, while net interest margin came in at 4.2 per cent.
Gross bad loans as a percentage of total loans stood at 1.33 per cent at end-June, versus 1.3 per cent at end-March. (Photo: PTI)
 Gross bad loans as a percentage of total loans stood at 1.33 per cent at end-June, versus 1.3 per cent at end-March. (Photo: PTI)

Mumbai: HDFC Bank Ltd posted a 18.2 per cent rise in first-quarter net profit but missed analysts’ estimates as the lender chose to include all mark-to-market losses in the first quarter, leading to higher provisions.

Net profit rose to 46.01 billion rupees ($669.43 million) for the quarter ended June 30, from 38.94 billion rupees a year ago, India’s second-biggest lender by assets said in a statement.

 

Analysts had on average expected a net profit of 47.66 billion rupees for the bank that has the highest market capitalisation in the sector at nearly $85 billion, according to Thomson Reuters data.

Gross bad loans as a percentage of total loans stood at 1.33 per cent at end-June, versus 1.3 per cent at end-March.

With its strong retail presence and relatively smaller exposure to sectors such as infrastructure that have led to record levels of bad loans in India’s banking sector, HDFC Bank is a favourite among investors.

Its loans at end-June grew 22 per cent from a year earlier.

Private sector banks have expanded loans at a faster pace and have snatched market share from dominant state-backed lenders that account for the bulk of bad loans in India.

Provisions, or the amount set aside by the bank to cover a future liability, for the quarter rose to 16.29 billion rupees from 15.59 billion rupees, last year, with the lender not opting for a central bank dispensation of spreading bond losses over four quarters.

This led to a mark-to-market loss of 3.91 billion rupees in the quarter, the bank said in a statement.

Net interest income rose 15.4 per cent from a year earlier, while net interest margin came in at 4.2 percent.

HDFC Bank’s smaller rival Kotak Mahindra Bank Ltd missed profit estimates earlier this week as provisions surged.

...




ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT