Private-lender HDFC Bank missed analysts estimate, despite reporting over 20% growth in it’s net profit for the quarter ended December 31, 2017 (Q3FY18).

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The bank posted net profit of Rs 4,642.60 crore in Q3, rising by 20.11% from Rs 3,865.33 crore in the corresponding period of the previous year.

Q3FY18 net profit also increased by 11.84% from Rs 4,151.03 crore of the preceding quarter.

A Bloomberg poll of experts projected HDFC Bank’s net profit to come in at Rs 4,720 crore.

Net Interest Income (NII) stands at Rs 10,314.34 crore, witnessing growth of 24.13% from Rs 8,309.09 crore in Q3FY17 and gradual rise by 5.76% versus Rs 9,752.07 crore in Q2FY18.

NII’s performance was driven by average asset growth of 16.6% and a core net interest margin for the quarter which came in at 4.3%.

Provisions and Contingencies of HDFC Bank came in at Rs 1,351.44 crore, increasing by a whopping 88.81% from Rs 715.78 crore in Q3FY17. However, Q3FY18 provisions decreased by 8.45% from Rs 1,476.19 crore of Q2FY18.

Meantime, gross non-performing assets (GNPA) were at Rs 8,234.88 crore - higher from Rs 5,232.27 crore in Q3FY17 and Rs 7,702.84 crore in Q2FY18.

In percentage terms, gross NPAs were at 1.29% in Q3 versus 1.05% in Q3FY17 and 1.26% in Q2FY18.

It needs to be noted that in it’s Q3FY18 audit report, HDFC Bank highlighted that it has reported divergence of Rs 2,051.76 crore in gross NPAs as on March 2017.

HDFC Bank said, “As part of it’s supervisory process for the year ended March 31, 2017, the RBI pointed out certain modification in respect of the bank’s asset classification of three accounts as on March 31, 2017.”

Thus,HDFC Bank’s gross NPAs stood at Rs 7,937.42 crore as assessed by RBI, while the bank reported Rs 5,885.66 crore of gross NPA as on March 2017.

Divergence in provisions were also seen. HDFC Bank’s provisions should have been at Rs 4,835.06 crore as on March, however the bank posted Rs 4,041.67 crore for the same period - which means there was divergence of Rs 793.39 crore as on March 2017.

In relation to the above,HDFC Bank mentioned that in the month of October 2017, the said three accounts were classified as NPA by the bank with effect from March 2016.

Here are key highlights of HDFC Bank in Q3FY18:

  • Other income were at Rs 3,869.20 crore up 27.3% year-on-year (YoY)
  • Components of other income performed well with fees income at Rs 2,872.1 crore, foreign exchange & derivatives at Rs 426.20 crore, gain on revaluation at Rs 259.4 crore and miscellaneous income of Rs 311.40 crore.
  • Operating expense for Q3FY18, grew by 18.4% to Rs 5,732.2 crore from Rs 4,842.5 crore a year ago same period.
  • Total balance sheet size stood at Rs 949,079 crore in Q3FY18 versus Rs 828,020 crore in Q3FY17.
  • Total deposits stood at Rs 699,026 crore up 10.1% yoy.
  • In Q3FY18, current account deposits were at Rs 101,286 crore and savings account deposits at Rs 205,833 crore.
  • CASA deposits grew by 6.7% over a year ago same period. It comprised 43.9% of the total deposits in Q3FY18.
  • Total advances in Q3FY18, were at Rs 631,215 crore up 27.5% yoy and 4.4% qoq.
  • Retail loans grew by 28.7% and wholesale loans book by 26.4% in Q3FY18.

For nine months period in FY18, net profit of HDFC Bank stands at Rs 12,687.50 crore up 20.2% yoy.

On BSE, HDFC Bank touched a 52-week high of Rs 1,957.85 per piece, and was trading at Rs 1,942 per piece up nearly 1% at around 1235 hours.