HDFC Bank Q3 Results: Net Interest Income grows 7.6% YoY, asset quality weakens as both NNPA & GNPA rise

HDFC Bank, India’s largest private sector lender, reported its standalone financial results for the quarter ended December 31, 2024 (Q3FY25). The bank’s Net Interest Income (NII) saw a robust growth both year-on-year (YoY) and quarter-on-quarter (QoQ), underscoring its strong operational performance.

Key Highlights:

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  1. Net Interest Income (NII):
    • Q3FY25: Rs 30,653.25 crore
    • Q2FY25: Rs 30,113.90 crore
    • Q3FY24: Rs 28,471.34 crore
    • YoY Growth: 7.66%
    • QoQ Growth: 1.79%
  2. Interest Earned:
    • Q3FY25: Rs 76,006.88 crore
    • Q3FY24: Rs 70,582.61 crore
  3. Interest Expended:
    • Q3FY25: Rs 45,353.63 crore
    • Q3FY24: Rs 42,111.27 crore

The bank’s Gross NPAs and Net NPAs have shown resilience despite challenging market conditions.

Key NPA Metrics for Q3 FY25:

  • Gross NPAs:
    ₹36,018.58 crore, up from ₹34,250.62 crore in the previous quarter, reflecting a slight increase.
  • Net NPAs:
    ₹11,587.54 crore, compared to ₹10,308.54 crore in Q2 FY25.
  • Gross NPA to Gross Advances Ratio:
    1.42%, stable compared to 1.36% in Q2 FY25.
  • Net NPA to Net Advances Ratio:
    0.46%, slightly higher than 0.41% in Q2 FY25.

Year-on-Year Comparison:

  • Gross NPAs (YoY):
    Increased from ₹31,011.67 crore in Q3 FY24 to ₹36,018.58 crore in Q3 FY25.
  • Net NPAs (YoY):
    Increased from ₹7,664.10 crore in Q3 FY24 to ₹11,587.54 crore in Q3 FY25.
  • Gross NPA Ratio (YoY):
    Up from 1.26% in Q3 FY24 to 1.42% in Q3 FY25.
  • Net NPA Ratio (YoY):
    Increased from 0.31% in Q3 FY24 to 0.46% in Q3 FY25.

Performance Analysis:

The bank’s NII growth reflects a strong increase in its interest-earning assets and a well-managed cost of funds. The YoY growth of 7.66% was driven by higher advances and a stable interest rate environment, while the QoQ growth of 1.79% indicates consistent operational efficiency.

 

Additional Financial Metrics:

  • Total Income: Rs 87,460.44 crore (up 8.48% YoY from Rs 80,717.65 crore in Q3FY24).
  • Net Profit: Rs 16,735.50 crore, a 2.59% YoY increase from Rs 16,372.54 crore in Q3FY24.
  • Operating Profit: Rs 25,000.40 crore, up 5.92% YoY.

Conclusion:

HDFC Bank’s strong NII growth reinforces its position as a market leader in the Indian banking sector. The bank continues to demonstrate resilience through its effective interest rate management and expansion of interest-earning assets, further cementing its operational dominance.

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