HDFC Bank Q2 Results: Net profit rises 5.3% to ₹16,821 crore, NII up 10% YoY; Asset quality declines

HDFC Bank Q2 Results: HDFC Bank announced its July-September quarter results for fiscal 2024-25 (Q2FY25) on Saturday, October 19, reporting a rise of 5.3 per cent in standalone net profit at ₹16,821 crore, compared to ₹15,976 crore in the corresponding period last year. Net interest income (NII)—the difference between interest earned and paid—rose 10 per cent to ₹30,110 crore compared to ₹27,390 crore in the year-ago period.

The September quarter will be the first time HDFC’s year-on-year (YoY) numbers will be comparable after its merger with its parent Housing Development Finance Corp (HDFC) was completed in July 2023. In the merger, HDFC Bank added a large volume of loans to its portfolio but a smaller amount of deposits, putting it under pressure to increase the pace at which it raises deposits or to slow loan growth in the current quarters.

Also Read: HDFC Bank Q2 Results Preview: Net profit likely to rise 3%, NII growth seen at 10% YoY; asset quality to remain stable

HDFC Q2 Results: Key Metrics

The core net interest margin (NIM) of India's largest private lender by market value was 3.46 per cent on total assets and 3.65 per cent on interest-earning ones in the September quarter, compared to 3.47 per cent and 3.66 per cent, respectively, in the previous June quarter.

The bank reported interest income of ₹74,017 crore during the quarter compared to ₹67,698 crore in the same period a year ago. The Mumbai-based lender's total income increased to ₹85,500 crore during the quarter under review compared to ₹78,406 crore in the same period last year.

HDFC Bank's asset quality witnessed slight deterioration, with gross non-performing assets (NPAs) rising to 1.36 per cent of the gross loans by the end of September 2024 from 1.33 per cent in the preceding June quarter. Similarly, net NPAs or bad loans rose to 0.41 per cent from 0.39 per cent in the June quarter.

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HDFC Bank's total balance sheet increased to ₹36,88,100 crore, up from ₹34,16,300 crore year-on-year. The bank's total deposits grew by 15.1 per cent to reach ₹25,00,100 crore, while CASA deposits rose by 8.1 per cent. The credit deposit ratio was 99.8, below the 100 per cent mark for the first time since the mortgage major parent HDFC merger into itself in July 2023.

Savings account deposits totalled ₹6,08,100 crore, and current account deposits amounted to ₹2,75,400 crore. The bank's provisions and contingencies for the September quarter amounted to ₹2,700 crore, down from ₹2,900 crore in the same quarter of the previous fiscal.

The total credit cost ratio stood at 0.43 per cent, compared to 0.49 per cent for the quarter ending September 30, 2023. HDFC Bank's operating expenses for the quarter rose 9.7 per cent to ₹16,890 crore, compared to ₹15,400 crore during the corresponding quarter of the previous year.

Also Read: HDFC Bank Q2 Update: Gross advances rise 7% to ₹25.19 lakh crore, deposits jump 15% YoY

In the July-September quarter, the bank's gross advances increased by seven per cent YoY to ₹25.19 lakh crore. Retail loans grew by 11.3 per cent, and commercial and retail banking grew by 17.4 per cent. However, corporate and other wholesale loans were lower by 12 per cent. 

The overseas advances constituted 1.7 per cent of the total advances. The bank's average advances under management rose 10.2 per cent YoY to ₹25,63,900 crore for the September quarter. The cost-to-income ratio stood at 40.6 per cent.

HDFC Bank's total capital adequacy ratio (CAR) stood at 19.8 per cent in Q2FY25, compared to 19.5 per cent in Q2FY24, surpassing the regulatory requirement of 11.7 per cent. The Tier 1 CAR was 17.8 per cent, while the Common Equity Tier 1 Capital ratio was 17.3 per cent in Q2FY25. Shares of HDFC Bank settled 0.47 per cent higher at ₹1,681.15 apiece on the BSE.