Healthy growth in advances, especially in the retail segment, helped HDFC Bank clock a 20 per cent year-on-year growth in net profit at ₹3,455 crore in the July-September 2016 quarter. The net profit in the year-ago quarter was ₹2,869 crore.

The bank reported a 19.6 per cent increase in net interest income (interest earned less interest expended) at ₹7,994 crore (₹6,681 crore in the year-ago period).

Non-interest income, comprising fees and commissions; foreign exchange and derivatives revenue; gain on revaluation/ sale of investments; and miscellaneous income, climbed 14 per cent to ₹2,901 crore (₹2,552 crore).

Total deposits increased 17 per cent year-on-year (y-o-y) to ₹5,91,731 crore. Advances were up 18 per cent to ₹4,94,418 crore.

Domestic retail loans and wholesale loans grew 21.7 per cent and 14.3 per cent, respectively. Advances in overseas branches were at 6.7 per cent of the total advances as of September-end 2016.

Paresh Sukthankar, Deputy Managing Director, explained that within the retail segment, demand was robust for auto, personal and home loans.

In the wholesale loan segment, he said, there was good demand for short- and medium-term working capital loans and refinance for completed projects. However, there was no appetite as yet for new capital expenditure.

Net interest margin was steady at 4.20 per cent but came off a few basis points as compared with the preceding quarter.

Sukthankar observed that since his bank raised additional liquidity in anticipation of redemption of FCNR(B) deposits, the same was parked in low-yielding short-term instruments, such as treasury bills. Hence, the NIM did not nudge up y-o-y.

The bank had mopped up $3.4 billion three years back under the RBI’s special scheme for mobilising FCNR(B) deposits.

While redemption of the non-leveraged portion of these deposits started last month, redemption of the leveraged portion (NRI depositors borrowing overseas and parking the same as deposits with the bank) will start later this month, said Sukthankar.

With the NRIs redeeming their FCNR(B) deposits to repay the loans they took overseas, the bank’s overseas loan book is expected to shrink to about 4 per cent.

Gross non-performing assets (GNPAs) rose to ₹5,069 crore as on September-end 2016 from ₹3,828 crore as on September-end 2015.

GNPAs as a proportion of gross advances nudged up to 1.02 per cent from 0.91 per cent.

Shares of HDFC Bank closed at ₹1,250.40 apiece, down 1.19 per cent over the previous close on the BSE.

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