India's HDB Financial Services posts quarterly profit rise on loan demand, lower provisions

By Reuters News

Oct 14 (Reuters) - Indian non-bank lender HDB Financial Services HDBF.NS posted a 34.2% rise in second-quarter profit on Wednesday, supported by improved loan demand and lower provisions.

Net profit rose to 7.8 billion rupees ($81.98 million) for the quarter ended September 30, from 5.81 billion rupees a year earlier.

  • The company, a unit of top Indian lender HDFC Bank, said its assets under management rose 11.6% year-on-year to 1.25 trillion rupees

  • Loan losses and provisions fell 2.4% year-on-year to 7.3 billion rupees

  • HDB Financial grappled with elevated bad loans in the first half of the previous fiscal year

  • It has been trying to improve its asset quality by following a more cautious approach to lending in stressed segments, including unsecured business loans, commercial vehicles, and construction equipment

  • Net interest income - the difference between interest earned and paid - climbed nearly 12% to 43.51 billion rupees.

  • The lender's net interest margin contracted to 8.2% from 8.4% a quarter ago and 7.9% a year earlier

  • Gross stage 3 loans - those overdue by more than 90 days - stood at 2.43% of total loans at the end of September, up from 2.34% at June-end, and down from 2.81% in the year-ago quarter


($1 = 95.1500 Indian rupees)

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