HDFC Bank Posts Higher-Than-Expected Q4 Profit on Strong Lending Growth

HDFC Bank reported a stronger-than-expected fourth-quarter profit, supported by solid growth in lending, especially in retail loans. The bank posted a standalone net profit of 192.2 billion rupees ($2.08 billion) for the quarter ended March 31, slightly above analyst estimates and higher than 176.16 billion rupees a year earlier. Growth in consumer borrowing was driven by improving household demand amid easing inflation and lower taxes.

The bank’s advances rose 12% year-on-year, led by mortgages and personal loans, while total deposits increased 14.4%. Net interest income rose 3.2% to 330.8 billion rupees, although net interest margins remained steady at 3.38%, still below pre-merger levels following the 2023 HDFC Ltd integration. Analysts continue to track margin recovery as a key indicator of merger success.

Asset quality improved, with gross non-performing loans easing to 1.15% from 1.24% in the previous quarter. However, treasury income fell 13.6% sequentially due to higher bond yields and regulatory constraints on forex operations, partially offsetting gains from core lending operations.

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