HDFC Bank, the country’s largest private sector lender by assets, has reported robust earnings for the December quarter, driven by higher income and a drop in provisions for bad loans. The bank has posted 18.08% year-on-year (YoY) growth in its net profit at ₹10,342 crore for the third quarter ended December 31, 2021. The Mumbai-headquartered bank had reported a net profit of ₹8,758 crore in Q3 FY21, the bank said in a regulatory filing on Saturday.

The total income of the bank increased by 8.33% to ₹40,652 crore in Q3 FY22, as against ₹37,523 crore in the same period last year. Net revenue, the sum of net interest income and other income, jumped 12.1% to ₹26,627 crore, from ₹23,760.8 crore in the corresponding period of the previous fiscal.

On the consolidated basis, net profit rose by 20.8% to ₹10,591 crore, over the quarter ended December 31, 2021. The consolidated total income climbed 8.85% YoY to ₹43,365 during the quarter under review.

HDFC Bank’s net interest income, the difference between interest earned and interest paid, rose 13% to ₹18,443.5 crore compared to ₹16,317.6 crore in the December quarter of 2020.

Non-interest income (comprising fee, services, and other income) grew by 9.9% to Rs 8,184 crore over Rs 7,443 crore in Q3 FY21. Income from fees and commissions increased to Rs 5,075 crore from Rs 4,975 crore in the same period last year.

The bank's operating expenses rose by 14.9% to Rs 9.851 crore in Q3 FY22, from Rs 8,575 crore in Q3 FY21.

Provision and contingencies declined by 12.3% ₹2,994 crore in October-December quarter of 2021 as against ₹3,414 crore in December 2020. The provisions for the current quarter included contingent provisions of around ₹900 crore, the bank said in the filing.

On the asset quality front, gross non-performing assets (NPAs) ratio as a percentage of gross advances rose to 1.26% from 0.81% in Q3 FY21. The net NPA ratio too increased to 0.37%, over 0.09% in the year-ago quarter. In absolute terms, the bank's gross NPA stood at ₹16,013 crore and net NPA stood at ₹4,676 crore as of December 31, 2021.

The bank said that it has not recognised any NPAs till August 31, 2020, in line with the interim order of the Supreme Court, and will not do so till further orders. “If the bank had classified borrower accounts as NPA after August 31, 2020, the bank’s proforma gross NPA ratio and proforma net NPA ratio as at December 31, 2020 would have been 1.38% and 0.40% respectively," HDFC Bank said.

As of December 31, 2021, HDFC Bank's total balance sheet size was ₹19.38 lakh crore, up 17.2% on year-on-year basis. Total advances increased by 16.5% YoY to ₹12.60 lakh crore, while total deposits rose by 13.8% to ₹14.45 lakh crore.

The bank’s total capital adequacy ratio (CAR) as per Basel III norms was at 19.5% as on December 31, 2021, against a regulatory requirement of 11.7%.

Ahead of Q3 results, shares of HDFC Bank settled 1.11% higher at ₹1,545.25 apiece on the BSE on Friday.

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