HDFC Bank Q3 net profit up 20%, says has no exposure to top defaulters

Mumbai: HDFC Bank Monday reported a 20.1 percent rise in the October-December quarter net profit at Rs 3,358.8 crore on higher core interest income as the second largest private lender said it is untouched by the regulator's special review on big-ticket bad assets.

The core net interest income rose 24 percent to Rs 7,068.5 crore in the October-December quarter, helped by asset growth of 28.2 percent and an almost 0.10 percent expansion in the net interest margin to 4.3 percent, the bank said.

Other income rose at lower pace of 13.3 percent to Rs 2,872.2 crore, with the core fee and commission incomes rising to Rs 2,004.8 crore from Rs 1,806.5 crore a year ago.

Unlike its peer Axis Bank, which witnessed a surge in bad assets following the RBI review of top 150 stressed assets, and others which are widely expected to show similar trends, HDFC Bank ducked the pressure with zero exposure to the list.

"We have not had any non-performing loans recognition issues (from the RBI's new list of top defaulters)," Deputy Managing Director Paresh Sukthankar told reporters.

It may be recalled that HDFC Bank was the first to declare Essar Steel account as an NPA in the first quarter of this fiscal itself and make full provisions for the same.

However, Sukthankar did not name the company, saying as a policy it does not disclose client specific details.

The bank reportedly had Rs 550 crore exposure to the company, which owes a whopping Rs 30,000 crore to 24 lenders, and has sold the NPA to ARCs at a hefty discount in April.

Sukthankar said there has been an increase of 0.06 percent in the gross non-performing assets ratio to 0.97 percent. He attributed this to slippages from the agri-banking and small businesses fronts, apart from a regulatory change in computation of credit card outstanding.

This has its overall provisions inching up to Rs 653.88 crore from Rs 560.43 crore a year ago. There was no sale of assets to ARCs during the quarter either, he said, adding the bank's overall restructured advances stood at 0.1 percent of the Rs 4,36,364 crore loan book.