A tax write back and a surge in core interest income helped HDFC Bank crank up net profits by 33.54 per cent to Rs 16,372.54 crore in the third quarter ended December 31 — easily overhauling analysts’ consensus estimate of Rs 15,800 crore.

In the same quarter a year ago, the private lender had clocked a net profit of Rs 12,259.49 crore.

The Rs 1500.96 crore tax write back was one of the key factors behind the leap in HDFC Bank’s net profits, and is expected to underpin the market’s expectations of a strong showing by the financial sector, especially banks, in the October-December quarter.

Core net interest income — interest earned minus interest expended — rose 23.9 per cent to Rs 28,470 crore from Rs 22,990 crore in the December 31, 2022 quarter.

On a sequential basis, it marked a rise of nearly 4 per cent, lower than analyst estimates.

Core net interest margin (NIM) declined to 3.4 per cent on total assets from 3.65 per cent in the preceding three months.

India’s No. 1 private sector lender made provisions and contingencies of Rs 4,220 crore against Rs 2,810 crore a year ago and Rs 2,904 crore in the second quarter.

The bank’s asset quality was stable with the proportion of gross non-performing assets (NPAs) to gross advances at 1.26 per cent compared with 1.34 per cent in the preceding quarter.

The percentage of net NPAs was 0.31 per cent against 0.35 per cent in the preceding quarter. Bad loans in absolute terms stood at Rs 31,011.67 crore against Rs 31,577.89 crore on a sequential basis.

Gross advances of the bank during the quarter came in at Rs 24.69 lakh crore, marking an increase of 62.4 per cent over December 31, 2022.

Domestic retail loans grew 111.1 per cent, commercial and rural banking advances by 31.4 per cent, while corporate and other wholesale loans were up by 11.2 per cent.

On the liabilities front, the total deposits stood at Rs 22.14 lakh crore, an increase of 27.7 per cent over December 31, 2022.

Low-cost CASA (current and saving account) deposits grew 9.5 per cent with savings account deposits at Rs 5.79 lakh crore and current account deposits at Rs 2.55 lakh crore.

The bank continued to add branches in the last quarter — and this was reflected in its distribution network standing at 8,091 branches and 20,688 ATMs across 3,872 locations.

Srinivasan Vaidyanathan, chief financial officer, said that the branch strength will rise to 13,000 in the next three to five years.

Federal Bank

Federal Bank reported a 23 per cent increase in consolidated net profit at Rs 1,035.42 crore in Q3, helped by a sharp decline in provisions and a rise in net interest income.

Core net interest income (NII) grew 8.53 per cent to Rs 2,123 crore, while other income jumped 61 per cent to Rs 863 crore.