HDFC Bank has posted a fiscal second quarter net profit of Rs 8,834.31 crore, up 17.6% from Rs 7,513.11 crore a year ago. This came on the back of higher other income while provisions were marginally up. 

Net interest income, the difference between interest earned and interest expended, rose 12.1% year-on-year to Rs 17,684 crore, as loan growth was robust. 

Loan growth

The bank’s total advances jumped 15.5% to Rs 11.98 lakh crore in the quarter ended September 2021. Sequentially, the loan growth was up 4.4%. 

"Advances grew at 15.5% reaching new heights driven through relationship management, digital offering and breadth of products. Core net interest margin was at 4.1%," HDFC Bank said.

Retail advances rose 12.9%, commercial and rural banking loans surged 27.6% while wholesale loans grew 6% from a year ago. The bank said overseas advances accounted for 3.5% of total loans for the quarter.

Deposit growth

Deposits rose 14.4% year-on-year to Rs 14.06 lakh crore in the quarter ended September 2021. Retail deposits rose 17.5% while wholesale deposits grew 2% YoY.

Current account savings account (CASA) deposits at Rs 6.58 lakh crore were up 28.7% from a year ago. CASA deposits now constitute 46.8% of total deposits, up from 41.6% in Q2FY20 and 45.5% in Q1FY22.

Asset quality and restructuring

The bank’s asset quality improved on a sequential basis as gross non-performing loans stood at 1.35% of gross advances as of September 2021, compared to 1.47% in the June quarter. Net non-performing assets (NPA) ratio fell to 0.4% from 0.48% a quarter ago.

Total provisions for the bank increased 6% YoY to Rs 3,925 crore. Provision coverage ratio improved to 70.9% in the September quarter, from 67.9% in the previous quarter.

Out of Rs 5,647.5 crore of retail loans restructured under the Reserve Bank of India's framework for Covid-hit borrowers, Rs 1,283 crore turned non-performing. Retail loans worth Rs 808.5 crore were written off in the September quarter.

HDFC Bank’s total restructured loans under the RBI's special window stood at Rs 7,829.48 crore. Out of this, Rs 1,687 crore turned NPA and Rs 856.7 crore were written off.

Restructuring under resolution framework 2.0 for personal loans was Rs 14,100 crore, Rs 1,500 crore was for individual business loans and Rs 1,780 crore for small business loans. Under this framework, the bank restructured 1.45% of advances and created Rs 2,000 crore of provisions towards this.

Other income

Other income (non-interest income) grew 21.5% YoY to Rs 7,401 crore. Revenue from fees and commissions, which accounted for 67% of other income, climbed 25.5% to Rs 4,945.9 crore YoY.