HDFC Bank Q2 FY25 Results: Net Profit Climbs 5% to ₹16,821 Crore, Supported by NII Growth

HDFC Bank, India’s largest private sector lender, reported a 5% year-on-year increase in net profit for the second quarter of fiscal year 2025, reaching ₹16,821 crore, surpassing market expectations. Analysts from seven brokerages had projected the bank’s Q2 net profit to be around ₹16,570 crore. The stronger-than-anticipated earnings were driven by robust growth in net interest income (NII), which climbed 10% YoY to ₹30,114 crore, although slightly below the consensus estimate of ₹30,306 crore.

The bank’s core net interest margin (NIM) was reported at 3.46% based on total assets and 3.65% on interest-earning assets, reflecting the bank’s ability to maintain profitability amid changing interest rate dynamics. Non-interest income, which includes fees, commissions, and other non-lending revenue, grew to ₹11,480 crore for the quarter, up from ₹10,710 crore in the same period last year.

Asset Quality Slightly Deteriorates as NPAs Edge Up

For HDFC Bank, the GNPA ratio inched up to 1.36% as of September 30, 2024, from 1.33% in the previous quarter. Gross NPAs increased to ₹34,251 crore as against ₹33,026 crore while net NPAs grew to ₹10,309 crore from ₹9,508 crore on sequential basis. This rise in NPAs has been accompanied by a higher provision for the quarter, estimated at ₹2,701 crore-up 4% over ₹2,602 crore in the immediate previous quarter. That would suggest a judicious approach towards asset quality management amidst changing macroeconomic conditions.

Deposit Growth Driven by Time Deposits, CASA Share Declines

The total deposits for HDFC Bank have increased 15.1% YoY to ₹25 lakh crore during Q2 FY25; time deposits have increased 19.3% YoY to ₹16.17 lakh crore, indicating that fixed deposits are preferred because of better interest. CASA deposits, however, stood in growth at 8.1% YoY, as of now: savings deposits are at ₹6.08 lakh crore and current account deposits at ₹2.75 lakh crore. Consequently, CASA deposits accounted for 35.3% of total deposits as of September 30, down from the previous quarter, underlining a dip in deposit mix.