July 19 (Reuters) – HDFC Financial institution, India’s largest non-public financial institution by market capitalisation, reported higher-than-expected quarterly revenue on Saturday resulting from a surge in curiosity revenue from loans and treasury positive aspects, whilst provisions for unhealthy loans spiked.
The financial institution’s standalone web revenue rose 12.2% to 181.55 billion rupees ($2.11 billion) within the April-to-June quarter, above the common analyst forecast of 172.84 billion rupees, in response to knowledge compiled by LSEG.
The financial institution’s web curiosity revenue – the distinction between curiosity earned on loans and paid on deposits – rose 5.4% to 314.38 billion rupees.
Different revenue, usually backed by treasury positive aspects and charges on providers, greater than doubled to 217.29 billion rupees within the quarter.
HDFC Financial institution’s provisions for unhealthy loans, nonetheless, jumped five-fold to 144 billion rupees.
The financial institution, in its alternate submitting, stated most of those provisions weren’t linked to any precise unhealthy loans however as a substitute acted as a “countercyclical buffer for making the steadiness sheet extra resilient.”
Indian lenders have been grappling with a rise in unhealthy loans in segments corresponding to microfinance and unsecured portfolio, which have pressured them to put aside extra funds for potential defaults and to strengthen their steadiness sheets.
On Thursday, HDFC Financial institution peer Axis Financial institution noticed its new unhealthy loans double resulting from a market benchmarking train.
Whereas total financial institution credit score progress has slowed in India, HDFC Financial institution posted progress of 6.7% for its total mortgage e-book, pushed by a 17.1% rise in loans to small and medium companies.
The non-public lender additionally accredited its first ever bonus share subject on Saturday, which means every of its shareholders will likely be eligible to obtain an additional bonus share for each share held. The date of issuance remains to be to be decided, the financial institution stated.
In a bonus subject, an organization distributes extra inventory to shareholders as a proportion of their holdings without charge. It’s usually an indication of confidence in monetary efficiency and progress trajectory.
The board has additionally accredited a particular dividend of 5 rupees per share. ($1 = 86.1450 Indian rupees) (Reporting by Ashwin Manikandan; Modifying by Joe Bavier)