HDFC Bank on Saturday topped Street estimates when it posted a 17.6 per cent growth in net profits for the second quarter ended September 30.

The country’s largest private sector lender reported a net profit of Rs 8,834.3 crore against Rs 7513.1 crore in the same period of the previous year. Analysts had expected the lender to post net profits of around Rs 8,000 crore.

The better-than-forecast rise in its bottomline came on the back of strong growth in net interest income (NII-interest earned minus interest expended) and other income.

NII, which represents its core income, grew 12.1 per cent to Rs 17,684.4 crore from Rs 15,776.4 crore in the year ago quarter.

Advances rose 15.5 per cent as the bank focussed on relationship management, digital offering and its breadth of products.

Other income rose almost 22 per cent to Rs 7,400.8 crore from Rs 6,092.5 crore in the corresponding quarter of the previous year.

The asset quality of the bank also showed a sequential improvement with the percentage of gross non-performing assets (NPAs) to gross advances falling to 1.35 per cent from 1.47 per cent in the first quarter of the fiscal.

In absolute terms, gross bad loans stood at Rs 16,346.07 crore against Rs 17,098.51 crore in the preceding three months.

However, provisions and contingencies showed a marginal rise over the year ago period at Rs 3,924.7 crore against Rs 3,703.5 crore.

Total provisions consisted of specific loan loss provisions of Rs 2,286.4 crore and general and other provisions of Rs 1,638.3 crore.

Loan restructuring

HDFC Bank has restructured loans worth Rs 7,829.48 crore under the Reserve Bank of India’s framework for Covid-19 related stress (announced in August last year) of which Rs 1,687.02 crore slipped into the NPA category and around Rs 857 crore of loans were written off.

While the bank restructured retail loans of Rs 5,467.49 crore, loans worth Rs 1,283.06 crore turned into NPAs.

Similarly, in the case of corporate loans of Rs 1,754 crore that were restructured, Rs 124 crore became NPAs.

In May this year, the central bank had extended the Covid restructuring scheme for individuals and small borrowers till September 30.

HDFC Bank said it has restructured loans worth Rs 14,102.61 crore in the case of individual retail borrowers.

During the quarter, the bank’s total balance sheet size stood at Rs 18,44,845 crore against Rs 16,09,428 crore as of September 30, 2020 — a growth of 14.6 per cent.

Total deposits as of September 30, 2021 was Rs 14,06,343 crore, an increase of 14.4 per cent over the year-ago period. Of this, low cost CASA deposits grew 28.7 per cent.

Total advances as of September 30, 2021 were Rs 11,98,837 crore, marking a rise of 15.5 per cent over September 30, 2020.

While retail loans grew by 12.9 per cent, commercial and rural banking loans showed a rise of 27.6 per cent and other wholesale loans by 6 per cent, the lender added.