Strong loan book growth takes HDFC Bank Q2 net profit up by 21% YoY

HDFC Bank posted a 21% growth in net profit to Rs 5,006 crore for the quarter ended September 2018 compared to Rs 4,151 crore in 2017 largely due to a strong loan book growth of 24%.

High loan growth aided net interest income which increased 21% to Rs 11,763 crore in the quarter ended September 2018 from Rs9,752 crore in the quarter ended September 2017.

Gross NPAs remaining flat at 1.33% from the previous quarter, but higher that 1.26% at the end of September 2017.


“HDFC Bank’s results were in-line with expectations, with much stronger operating parameters seen as compared to recent past. Strong advances growth but stable asset quality are clear stand outs at present times.” Said Lalitabh Srivastava, assistant vice president of Research at Sharekhan.

Personal loans and auto loans formed the largest part of the bank’s domestic retail lending constituting 21% and 20% respectively. Personal loans grew at 37% to Rs83,426 crore while auto loans grew at 16% to Rs80,336 crore.

The bank was also able to bring down its cost to income ratio to 39.9% for three months ending September 2018 compared to 41.5% for the same period in 2017. Net interest margin for the quarter was unchanged from the quarter ended September 2017 at 4.3%.

The Bank’s CASA ratio declined marginally from 42.9% In September 2017 to 42% in September 2018 pushing up cost of funds. CASA is the ratio of current account and savings account deposits to total deposits which are low cost sources of funds for banks. A higher CASA ratio indicates lower overall cost of funds and improves profitability.