Several private sector lenders reported their quarterly earnings on Saturday. On the one hand, while larger lenders HDFC Bank and Kotak Mahindra Bank reported a rise in net profit in the July-September quarter, smaller rival RBL Bank saw profits slump. While deposit growth has been strong, all three lenders saw some sequential deterioration in asset quality.
HDFC Bank reported strong results on Saturday, with the net profit beating street expectations. HDFC Bank's standalone net profit in the July-September quarter rose over 5 per cent from a year ago to Rs 16,820 crore (versus analysts' expectations of around Rs 16,570 crore). The net interest income was up 10 per cent from a year ago to Rs 30,110 crore in the second quarter.
The country's largest private sector bank also saw deposits growing at a much faster clip than credit growth.
ALSO READ: RBI takes action against four NBFCs for predatory pricing
Over the past several quarters, banks have been facing challenges to shore up deposits even as credit growth has been strong. Deposit growth consistently lagging credit growth had even the regulator Reserve Bank taking note, with RBI Governor Shaktikanta Das noting in August that alternative investment practices becoming more attractive to retail investors.
HDFC Bank reported a 15 per cent year-on-year rise in deposits and its total deposits stood at Rs 25 lakh crore in the July-September. In contrast, gross advances at the lender rose 7 per cent from a year ago to Rs 25.19 lakh crore.
Rival Kotak Mahindra Bank also reported a 5 per cent rise in quarterly net profit at Rs 3,344 crore. However, that was slightly lower than a CNBC-TV18 poll of analysts forecasting around Rs 3,513 crore. The bank's net interest income was up 11 per cent to Rs 7,020 crore.
It saw a 16 per cent rise in deposits in the second quarter; its average deposits stood at Rs 4.46 lakh crore, while advances rose 17 per cent to Rs 4.19 lakh crore.
READ MORE: Slow sales growth in the festive season dampens two-wheeler market sentiment
Elsewhere, smaller rival RBL Bank saw its net profit slump 24 per cent to around Rs 223 crore, even as net interest income rose 9 per cent from a year ago to Rs 1,615 crore.
The lender also reported a good 20 per cent growth in deposits at Rs 1.08 lakh crore, while advances were up 15 per cent to Rs 87,882 crore. All three lenders have generally seen their asset quality worsen slightly when compared on a sequential basis.
HDFC Bank's gross non-performing assets (NPA) stood at 1.36 per cent in September quarter, up from 1.33 per cent in June. Kotak Bank's gross NPAs, meanwhile, rose to 1.49 per cent from 1.39 per cent in the same period. RBL Bank's gross NPAs also rose quarter-on-quarter to 2.88 per cent in September from 2.69 per cent in June.