HDFC Bank's Q1FY25 results: Net profit surges 35% to ₹16,175cr
HDFC Bank, the largest private sector lender in India, has reported a significant 35% year-on-year (YoY) increase in net profit for the quarter ending June 2024 (Q1FY25). The bank's net profit reached ₹16,175 crore, surpassing Bloomberg analysts' estimate of ₹15,652 crore. This impressive growth was primarily fueled by the robust net interest income (NII) and reduced provisions.
Sequential decline in net profit
Despite the YoY increase, HDFC Bank's net profit saw a slight sequential decrease of 2%, falling from ₹16,511.85 crore in the previous quarter (Q4FY24). This decline was attributed to slower income growth and increased tax expenses. In the corresponding period a year ago (Q1FY24), the bank had reported a net profit of ₹11,952 crore.
NII and provisions show a positive trend
HDFC Bank's NII for Q1FY25 stood at ₹29,837 crore, marking a significant increase of 26.4% from the same period last year. Sequentially, NII rose by 2.6% from Q4FY24. The bank also reported a decrease in provisions by 9% YoY to ₹2,602 crore in Q1FY25, down more than five times from ₹13,511 crore in Q4FY24.
Asset quality declines, NPAs increase
HDFC Bank's asset quality showed signs of decline, as its gross non-performing asset (NPA) ratio increased by nine basis points sequentially to reach 1.33% in Q1FY25. Net NPAs also saw a six basis points increase during this period, reaching 0.39%. This indicates a slight deterioration in the bank's loan portfolio quality over the quarter.
HDFC Bank reports a significant rise in advances
The bank reported a significant 52.6% YoY rise in advances in Q1FY25, primarily driven by a rise in retail loans, which increased by over 100% YoY. This was followed by a rise in commercial and rural banking loans at 23% YoY, and corporate and wholesale loans at 18.7% YoY. These figures reflect the bank's strong performance in loan growth during the quarter.
Deposit growth lags behind advances
Despite the strong performance in loan growth, HDFC Bank's deposit growth lagged behind. In Q1FY25, the bank reported a 25.2% YoY growth in deposits to ₹22.83 lakh crore. Its current account savings account (CASA) deposits saw an increase of 8.1% YoY to ₹8.10 lakh crore, indicating a slower pace compared to advances.
