HDFC Bank declined 3 per cent to Rs 1,475 on the BSE in intra-day trade on Monday after the lender reported lower than expected performance for the quarter ended June (Q1FY22).

The bank posted a 16.1 per cent jump in Q1 net profit to Rs 7,729.6 crore as the bank’s asset quality deteriorated and provisions increased. The country’s largest private-sector lender’s profit stood at Rs 6,659 crore in the same period last year (Q1FY21).

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The net interest income (NII) of the lender rose 8.57 per cent year-on-year (YoY) in Q1FY21 to Rs 17,009 crore, driven by growth in advances at 14.4 per cent a net interest margin of 4.1 per cent. In the same period, the other income of the lender was up 54.3 per cent YoY at Rs 6,228.5 crore. HDFC Bank posted a moderate operating performance due to a fall in net interest margins (NIMs) by ten basis points (bps) quarter-on-quarter (QoQ) to 4.1 per cent.

The asset quality of the bank deteriorated slightly at the end of the June quarter. Gross non-performing assets (NPAs) of the bank stood at 1.47 per cent as opposed to gross NPAs of 1.32 per cent at the end of the March quarter and 1.36 per cent as of June 30, 2020. Net NPAs of the bank stood at 0.48 per cent of the advances portfolio.

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HDFC Bank Ltd-View Detailed Analysis