India’s largest private sector lender HDFC Bank Ltd. missed estimates, as the bank’s asset quality worsened.
Net profit for the first quarter stood at Rs 7,729.62 crore, up 16% year-on-year. This was lower than the Rs 7,931 crore consensus estimate of analysts in a Bloomberg poll.
Net interest income, or core income, rose 8.6% year-on-year to Rs 17,009 crore, according to the bank’s statement to exchanges. Analysts had estimated the first quarter NII at Rs 17,634 crore.
Gross non-performing assets rose 15 basis points sequentially to 1.47% of gross advances. Net NPA ratio for the first quarter was at 0.48%, as compared with 0.4% on March 31, 2021.
Total provisions rose 24% year-on-year to Rs 4,831 crore, according to the bank’s disclosures.
“The second wave of Covid-19 disrupted business activities for close to two thirds of the quarter, leading to a decrease in efficiency in collection efforts and a higher level of provisions,” the bank said in a statement with its results.
As of June 30, the bank said that it had restructured loans worth Rs 7,800 crore, under the Reserve Bank of India’s one time restructuring scheme. This included Rs 5,457 crore worth retail loans, and Rs 1,735 crore worth corporate loans. The bank also restructured loans worth Rs 608 crore to other borrowers under the scheme.
The disruptions from the Covid-19 pandemic affected retail loan originations, sale of third party products and card spends, which affected business volumes and revenue, the bank said.