Mumbai :  HDFC Bank reported its lowest profit growth of 21.1% in over 10 years in the first quarter of this fiscal as net interest margin dropped slightly.

The bank reported Rs 2,233 crore profit against Rs 1,844 crore in the April-June quarter of 2013-14.        The bank attributed the fall in profit to a 20-basis point dip in net interest margin (NIM), which declined to 4.4 % in the reporting quarter.        However, total income jumped to Rs 13,070.7 crore from Rs 11,588.56 crore in the year-ago period.

“NIM in the first quarter was stable sequentially, but on a y-o-y basis it has dropped slightly. If you look at our range of NIM, it has been around 4.1-4.4 percent. It would be at the upper end of the range going forward,” HDFC Bank Deputy Managing Director Paresh Sukthankar told reporters here. Interest earned rose 16.1 % to Rs 11,220.1 crore from Rs 9,663 crore last year same period. Net interest income, which is the interest earned minus interest paid, during the period grew 17 % to Rs 5,171.6 crore he said. It accounted for 74 % of net revenue. The asset quality slightly deteriorated with gross non-performing assets (NPAs) at 1.07 %.

“The three-four basis points increase in NPAs has happened from agriculture, SME and a little bit on retail, including commercial vehicles and commercial equipment businesses. There is not a large particular segment which showed any material deterioration,” Sukthankar said.

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