HDFC Bank: Bad news! NPA increased from Rs 31,012 crore to Rs 36,019 crore, major default in Agri Loans

HDFC Bank, the country’s largest private sector lender, reported a 2.2 per cent rise in net profit to Rs 16,735.5 crore for the quarter ended December 2024. This was due to slow growth in headline income and high defaults on agricultural loans.

Net interest income, which is the difference between interest earned and interest spent, increased by 7.7 per cent to Rs 30,650 crore over the previous year while other income remained almost flat at Rs 11,450 crore. Mark to market profit on investments declined to Rs 70 crore compared to Rs 1,470 crore during the same period last year.

Net interest margin in the third quarter of the current financial year stood at 3.43 percent, which remained stable as compared to the same period last year. However, it was less than 3.5 percent in the second quarter. Provisions and contingencies declined to Rs 3,150 crore compared to Rs 4,220 crore.

Asset quality deteriorated and gross non-performing assets (NPAs) rose to Rs 36,019 crore as against Rs 34,251 crore in the previous quarter and Rs 31,012 crore during the same period last year. The gross NPA ratio at the end of December 2024 was 1.42 percent compared to 1.36 percent at the end of September and 1.26 percent a year ago.

Defaults during the quarter stood at Rs 8,800 crore and excluding the agriculture sector, the amount stood at Rs 6,500 crore. The net NPA ratio also increased to 0.46 per cent compared to 0.41 per cent in September and 0.31 per cent in the year-ago period.

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