HDFC Bank earnings beat estimates, up 18% on annual loan growth

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(Bloomberg) – The earnings of HDFC Bank Ltd. rose in the third quarter, beating estimates, helped by loan growth and improving asset quality as consumer demand picked up.

Net profit stood at INR 103.4 billion rupees ($1.4 billion) for the quarter ending December, compared to 87.6 billion rupees a year ago. That beat the average estimate of 101.4 billion rupees by 12 analysts in a Bloomberg survey.

India’s largest private lender is the first bank to release third quarter figures. HDFC Bank lending grew 5.1% in the quarter, outpacing the banking sector’s 4%. The lender stepped up lending to individuals after the lifting of a regulatory ban on issuing new credit cards.

Yet a rise in coronavirus cases is raising questions about India’s ability to maintain its global growth momentum as the spread of infections forces people to stay indoors. Bloomberg Intelligence analysts Rena Kwok and Sheenu Gupta say micro and small business loan slippages could rise through March as some repayment moratoriums expire, though HDFC Bank’s ample provisioning keeps it high .

Read: Citi, ICICI Cut India’s growth projections on virus surge

HDFC Bank’s gross bad debt ratio narrowed to 1.26% at the end of December from 1.35% three months ago. It set aside 29.9 billion rupees in provisions in the third quarter, less than 39.2 billion rupees the previous three months and 34.1 billion rupees a year ago.

©2022 Bloomberg LP

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