HDFC Bank, the country’s second largest private bank, posted a 25 per cent jump in net profit in the October-December quarter on the back of robust loan growth, lower provisioning and tighter cost control.

This is the second consecutive quarter that the bank’s year-on-year profit growth has been below 30 per cent.

The net profit was Rs 2,326 crore as compared with Rs 1,859 crore in the year-ago period. Net interest income grew 16 per cent and other income, 11 per cent.

“The focus was on better cost control measures…Expense growth was curbed under 4 per cent year-on-year. Stable asset quality gave us some cushion in terms of lower provisioning (at Rs 389 crore from Rs 405 crore),” said Paresh Sukthankar, Deputy Managing Director.

The bank recorded an overall loan growth of 23 per cent as on December 31, 2013, boosted by loans to NRIs (nearly $2 billion) and large and mid-size firms (22 per cent growth).

On the other hand, retail loans grew 14 per cent, slower than the 30 per cent in the December quarter last year.

The bank’s operating expenses increased by a meagre 3.8 per cent due to lower staff cost as the bank reduced its staff strength by 1,500 employees to 68,200 since December 2012. This led to an improvement in its cost-to-income ratio to 43 per cent in Q3 FY14 from 47 per cent in the corresponding quarter last year.

Deposits grew 23 per cent and if adjusted for FCNR deposits raised during the quarter, the growth would have been 15.5 per cent.

Bad loans Gross non-performing assets (NPAs) increased to Rs 3,018 crore (1 per cent) as on December 31, 2013, from Rs 2,432 crore (1 per cent) as on December 31, 2012.

The bank’s restructured assets portfolio declined to Rs 507 crore (0.2 per cent of gross advances) as on December-end 2013 from Rs 684 crore in the year-ago period.

The shares of HDFC Bank ended weaker at Rs 668.30 per share, down by 0.84 per cent over the previous close on the BSE.

>beena.parmar@thehindu.co.in