HDFC Bank Ltd shares dropped nearly 3% in early trade on Monday, i.e. 22 July, as the lender’s June quarter earnings showed slight strains on asset quality, even as profit came in line with analyst expectations.
At 9:43 am, HDFC Bank stock was trading at Rs 2,315.05, down 2.55%, on BSE after hitting an intra-day low of Rs 2,307.50. The stock has risen over 10% in the last one year.
At its earnings announcement on Saturday, HDFC Bank said its profit rose 21% to Rs 5,568.2 crore in the June quarter from Rs 4,601.44 crore in year-ago period. Earnings were aided by a sharp 23% jump in net interest income to Rs 13,294 crore during the quarter due to strong asset growth and a core net interest margin of 4.3% during the period.
However, HDFC Bank’s gross as well as net non-performing assets (NPAs) increased by 4 basis points each to 1.4% and 0.43%, respectively, in the June quarter compared with the previous quarter.
Provisions for bad loans also increased significantly to Rs 2,613.7 crore in the June quarter, higher by 38.3% compared to the previous quarter, and up by 60.4% from the year-ago period.
Loan growth stood at 17.1% year-on-year to Rs 8.3 trillion in the June quarter. “Advances to the vehicle loan segment, where sales volumes have seen some moderation, grew at 8.3% over the previous year. Domestic advances grew by 17.9% over June 2018,” HDFC Bank said in its BSE filing.
HDFC Bank’s other income also grew by a healthy 30.2% growth in to Rs 4,970.3 crore in the June quarter. Of this, the fees and commissions component grew 12% year-on-year, while revenue from foreign exchange and derivatives rose 15.4% during the quarter.
The board of directors also declared a special interim dividend of Rs 5 per equity share to commemorate 25 years of the bank’s operations.
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