HDFC Bank Ltd.'s second-quarter net profit rose 16% compared with the same period a year earlier as improved interest income offset higher provisions related to the Covid-19 pandemic.
Net profit for the quarter ended September rose to 77.03 billion rupees ($1.05 billion), the Indian lender said Saturday.
Interest income rose 5.7% to INR317.42 billion, while provisions and other contingencies jumped 43% to INR44.20 billion amid slowing business activity caused by national movement restrictions, HDFC said.
"While there have been some improvements in economic activities during the current quarter, the continued slowdown has led to a decrease in loan originations, the sale of third-party products, the use of credit and debit cards by customers and the efficiency in collection efforts," the bank said.
Going forward, it said that the slowdown may cause a rise in defaults and consequently an increase in provisions. The pandemic's effects on operations remain uncertain, it said.
Separately, HDFC noted that its board had approved the appointment of Sashidhar Jagdishan as chief executive for a period of three years following the retirement of his predecessor.
(END) Dow Jones Newswires