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Home / Markets / Stock Markets /  HDFC Bank hits record high after Q3 net profit jumps over 18% YoY

MUMBAI: Shares of HDFC Bank rose 2.5% to hit a record high of Rs1,503 on Monday after the private lender reported an 18.1% year-on-year (y-o-y) increase in its December quarter net profit to 8,758.29 crore. Total income rose 4.1% to Rs37,522.92 crore during the period.

Net interest income for the quarter ended December grew 15.1% to Rs16,317.6 crore from Rs14,172.9 crore in the year-ago period, driven by a 15.6% in growth in advances, with core net interest margin for the quarter at 4.2%. The bank's focus on deposits helped it maintain a healthy liquidity coverage ratio of 146%, well above the regulatory requirement.

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Gross non-performing assets (NPAs) stood at Rs8,825.56 crore as on 31 December against Rs11,304.60 crore on 30 September, and Rs13,427.25 crore as on 31 December 2019.

As of December end, HDFC Bank also had provisions against the potential impact of covid-19, based on the information available at that point of time, which were in excess of Reserve Bank of India (RBI)-prescribed norms.

Analysts at Emkay Global are betting on the lender's strong credit growth. "Overall credit growth remains healthy at 16% y-o-y, led by continued traction in the corporate book and some improvement in the retail non-auto book, including cards. The bank is in discussion with the RBI on a remedial plan to resolve the tech-outage issue but awaits a response as to when the regulator would lift restrictions on new card acquisition," it said in its post-earnings report.

Motilal Oswal Financial Services said it hopes of outperformance on the back of healthy growth in operating income, much higher provision than regulatory requirement on the balance sheet, a strong capital cushion of 17% at CET1 level, and best-in-class underwriting and risk management practices.

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