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HDFC Bank, India's second-largest lender, has reported a robust 35.33% jump in net profit for the June quarter, reaching Rs 16,174.75 crore. This marks a return to the bank's historical trend of exceeding 30% net income, a feat it achieved for 34 consecutive quarters before the pandemic era. However, it's crucial to note that these figures are not directly comparable to previous periods due to the merger with its parent company, which took effect from July 2022.
The impressive profit growth comes despite a notable increase in non-performing assets (NPAs). The bank experienced a doubling of its standalone net NPAs and a 73% rise in gross NPAs on an absolute basis. This surge can be attributed to the expanded balance sheet following the merger. However, when viewed in percentage terms, the rise in NPAs is less significant. This is because the bank has significantly reduced its loan provisions, signifying an improvement in asset quality. Loan provisions for the quarter stood at Rs 2,602 crore, a significant decrease from Rs 13,511.64 crore in the previous quarter.
In percentage terms, gross NPAs (GNPA) climbed to 1.33% in the June quarter, up from 1.24% in the previous quarter and 1.17% a year ago. Similarly, net NPAs (NNPA) increased to 0.39% from 0.33% as of March 2023 and 0.30% as of June 2023. However, in absolute terms, GNPA rose to Rs 33,025.69 crore compared to Rs 31,173.32 crore in March 2023 and Rs 19,064.12 crore in June 2023. Likewise, NNPA stood at Rs 9,508.44 crore in the reporting quarter, up from Rs 8,091.74 crore in the previous quarter and Rs 4,776.87 crore a year ago. In the year-ago quarter on a standalone basis, its net income was Rs 11,951.77 crore. The improved asset quality resulted in lower provisioning, reaching Rs 2,602 crore compared to Rs 2,860 crore a year earlier.