Mumbai, Oct. 15: HDFC Bank today posted its slowest quarterly growth in net profits in a decade, recording an increase of 27.1 per cent at Rs 1,982.3 crore in the second quarter ended September.
It was the first time in 12 years that the third-biggest lender by assets failed to achieve a 30 per cent quarterly growth in net profits.
In the same quarter a year ago, the bank had reported a net profit of Rs 1,559.98 crore.
A 30-basis-point drop in net interest margins and losses it suffered in its treasury income (income generated by investing in bonds) botched the private bank’s sterling record.
It may be recalled that during the quarter, yields on government securities jumped as a consequence of liquidity tightening measures by the Reserve Bank of India. The bank posted mark-to-market losses of Rs 135 crore on its bond portfolio. However, the private sector lender preferred not to amortise these losses over the full year. Had this been done, its net profit would have risen by nearly Rs 77 crore.
Disappointed by the slow growth in profits, investors pummelled the stock, which lost 2.37 per cent, or Rs 15.80, to close at Rs 651.40 on the BSE.
During the quarter, net interest income (interest earned minus interest paid) of the lender grew over 15 per cent to Rs 4,476.5 crore from Rs 3,881.9 crore a year ago.
Other income (non-interest revenue) rose 25.3 per cent to Rs 1,844.4 crore from Rs 1,471.8 crore a year ago.