Millennium Post
Business

HDFC Bank Q2 profit up 27 per cent; slowest in a decade

Profit in the September quarter was helped by a healthy jump in core income but there were issues on asset quality.

The bank chose not to amortise net depreciation on available-for-sale (AFS) and held-to-maturity (HTM) bonds over three quarters and took a one-time hit, which dragged profit down by Rs 76.61 crore, executive director Paresh Sukthankar said. We have not had any fixation of a particular number. The actual number rolls
out,' he said.

The Reserve Bank of India had given banks the one-time flexibility after its unconventional liquidity tightening measures of July jacked up bond yields.

The RBI had also allowed banks to transfer securities from the AFS/held-for-trade category to HTM, and accordingly, HDFC Bank transfered Rs 1,932 crore of government bonds from AFS to HTM, thereby protecting its profit by Rs 25.51 crore, the bank said in a note.

During the quarter, the bank continued to face issues on asset quality from the construction equipment and commercial vehicles front, and also a marginal squeeze in the net interest margin.
The bank's core net interest income was up 15.3 per cent to Rs 4,476.5 crore, while non-interest income rose 25.3 per cent to Rs 1,844 crore. It took a mark-to-market loss of Rs 173.3 crore, which is reflected in non-interest income.
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