HDFC Bank on Wednesday reported a 2.3 per cent year-on-year rise in its consolidated net profit to Rs 17,657 crore for the October-December quarter, restricted by slower loan growth.
On a standalone basis, the largest private sector lender's net profit came at Rs 16,735.50 crore for the period, up from Rs 16,372.54 crore in the year-ago period, but marginally down from the preceding quarter's Rs 16,820.97 crore.
Total income on a standalone basis rose to Rs 87,460 crore in the third quarter of 2024-25 against Rs 81,720 crore in the year-ago period.
Its core net interest income grew by 7.7 per cent to Rs 30,650 crore on the back of the net interest margin being stable on-year at 3.43 per cent and the bank's loan growth coming at 6.6 per cent.
The non-interest income was up 2.8 per cent at Rs 11,450 crore on a good growth in core fees and commissions line.
The net interest margin, which has been the subject of investor concerns since the bank merged its home finance parent HDFC with itself, has been fairly stable and has seen an upward bias as well, chief financial officer Srinivasan Vaidyanathan told reporters on a call.
He said the bank has been deliberately slowing down on the loan growth and the ongoing period of a slowdown in the system's credit growth has helped it to strengthen the balance sheet by bringing down the credit-deposit ratio, which will help it grow faster when the macro cycle turns for the better.
It will take two more years to reduce the CD ratio to the aspirational level of being below 90 per cent levels, which is probably one year earlier than what was earlier guided, the CFO said, attributing the advancement to changes in credit growth.
The bank is targeting to grow credit book below the system in FY25, and will take it at par with the system in FY26 and hopes to outpace the system by FY27, he said.
On the home loans front, the flagship product of its erstwhile parent, Vaidyanathan said state-run lenders' aggressive posture is inhibiting growth, which came at 9.7 per cent on-year.
Making it clear that the bank is not chasing volumes and wants to derive as much benefit from a loan relationship, including by having a savings account, Vaidyanathan said public sector banks are offering loans at 8.15 per cent while the bank's rates go up to 8.4 per cent.
On the deposits front, the bank posted a growth of 15 per cent, and the CFO said there is no calibration on this front and it wants to grow as fast as it can.
From an asset quality perspective, the fresh slippages were stable at around Rs 6,400 crore but the gross non-performing assets ratio moved up to 1.42 per cent because of seasonal push coming from agri loan exposures.
Adjusted for the agri loans, the GNPA was stable at 1.19 per cent.
Unlike the broader system, the bank did not face any difficulties on the unsecured advances front, including credit cards, personal loans and microloans.
The CFO said all three portfolios are "pretty stable and strong at an aggregate level", and attributed the same to financial education efforts where a dedicated team of 10,000 people works on awareness, the microloans being fully women-centric and also efforts to slow down the growth earlier.
He said the growth in unsecured assets came down to 10 per cent in FY24 from 19 per cent in FY23, and has reduced further to about 9.5 per cent in the first nine months of FY25.
The CFO, however, made it clear that the bank's preference or bias is towards growing the retail assets which have now grown to occupy 58 per cent of the book, and added that this is where its investments are centered.
On the loan securitisation, Vaidyanathan said about Rs 45,000 crore of portfolio has been sold in the first nine months of FY25 including Rs 20,000 crore in Q3 alone, and added that the same will continue going forward as well.
The overall capital adequacy was over 20 per cent as of December with the core buffers at over 17 per cent.
Capital markets regulator Sebi is reviewing its application on having an initial public offer of the in-house non-bank subsidiary HDB Financial Services, which has been mandated to list by September this year, the CFO said.
HDB Financial Services reported a net profit of Rs 470 crore, HDFC Life Insurance Rs 410 crore, the asset management arm Rs 640 crore and securities at Rs 270 crore.
HDFC Bank shares gained 1.42 per cent to close at Rs 1,665.05 apiece on the BSE against gains of 0.75 per cent on the benchmark.
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