MUMBAI, Jan 17 (Reuters) - Indian private lender HDFC Bank reported a higher-than-expected profit for the third quarter on Saturday as loan growth remained strong and margins improved sequentially.
The country's largest private lender by market capitalisation posted a standalone net profit of 186.53 billion Indian rupees ($2.06 billion) for the three months ended December 31, an 11.5% increase from 167.35 billion rupees a year earlier. Analysts had expected a profit of 183.7 billion rupees, according to data compiled by LSEG.
The Mumbai-based lender's net interest income rose 6.4% to 326.2 billion rupees, while its net interest margin improved to 3.35% from 3.27% in the previous quarter.
The Reserve Bank of India cut its benchmark interest rate by a cumulative 125 basis points since February 2025 to spur consumption and investment. Banks are seeing a pick-up in margins, which had been squeezed earlier in the year as loans repriced faster than deposits.
HDFC Bank, which has been shoring up its deposit base after a merger with its parent HDFC two years ago, said deposits grew 11.6% in the quarter from a year earlier.
Loans grew 12%, driven by a pick-up in large corporate and small business loans.
The Mumbai-based lender's asset quality was stable with a gross non-performing asset ratio of 1.24% at the end of December, the same as three months earlier.
Funds set aside for potential bad loans and other losses fell 10% from a year earlier to 28 billion rupees.
($1 = 90.6820 Indian rupees)
(Reporting by Ashwin Manikandan and Ira Dugal in Mumbai; Editing by Ronojoy Mazumdar, Kirsten Donovan)
