HDFC Bank: Failed To Surprise

India’s second largest private sector lender, HDFC Bank, failed to surprise the market, but was able to meet expectations in the third quarter. Net interest income (NII) increased by 16.4% on a yearly basis to Rs 4635 crore. Other income, which formed 16.8% of the total income of the Bank grew by 11.4% during the same period. 

In its net earnings, HDFCB failed to claim its coveted position of delivering a 30% growth year on year. Net profit of the bank for the December quarter increased by 25.1% on a yearly basis and stood at Rs 2326 crore. Despite the lacklustre growth in other income and NII, it was able to deliver a good net profit figures thanks to a fall in the cost to income ratio of the bank from 47.2% at the end of Q3FY13 to 42.7% this quarter. Its provisions and contingencies too fell by 4% in the same period and stood at Rs 388.84 crore. 

The asset quality of the bank remained stable. In absolute terms gross NPAs and net NPAs increased by 3% and 4% on a sequential basis and stood at Rs 3017 crore and Rs 797.34 crore respectively. While as percentage of gross advances, its gross NPAs saw a decline of 10basis points on a sequential basis while the net NPAs remained unchanged at 0.3%. 

Shares of the bank closed today (January 17, 2014) at Rs 668.3 down by 0.84%.