HDFC Bank writes off bad loans worth Rs 3,100 crore in Q1

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HDFC Bank sold NPAs worth Rs 1,800 crore in the quarter ended June 2021 as against Rs 1,000 crore worth NPA sold in the same period last year.

HDFC Bank writes off bad loans worth Rs 3,100 crore in Q1

Bad loan write-offs from the HDFC Bank doubled to Rs 3,100 crore in the first quarter of FY22 from Rs 1,500 crore in the corresponding quarter of FY21. The country’s largest private lender also sold NPAs (non-performing assets) worth Rs 1,800 crore in the quarter ended June 2021.

In the same period last year, the bank had offloaded NPAs worth Rs 1,000 crore.

The asset quality of HDFC Bank during the quarter deteriorated as the gross NPAs recorded an uptick in the wake of the pandemic and the consequent lockdown.

The gross NPAs during the quarter increased to 1.47 percent of gross advances as against 1.32 percent in Q4FY21, and net non-performing assets were at 0.48 percent against 0.40 percent, QoQ.

In absolute numbers, gross NPAs in the June quarter rose 13.33 percent to Rs 17,098 crore from Rs 15,086 crore in the previous quarter.

Meanwhile, HDFC Bank's retail loan book decreased from Rs 5.27 lakh crore at the end-March 2021 to Rs 5.23 lakh crore at the end-June 2021.

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The worrying figures come more than a month after the Reserve Bank of India (RBI) imposed a penalty of Rs 10 crore on the bank in relation to the auto loan-GPS bundling controversy.

The central bank had slapped the fine after it found out that the car loan customers of the HDFC Bank were “forced” to purchase a vehicle tracking device between 2015 and 2019.

Further, the RBI, in December 2020, also stopped HDFC Bank from issuing new credit cards after repeated tech outages. The private lender was also barred from rolling out any new digital offerings. The bank has now said that it has complied with 85 percent of RBI's asks on technology and that the ball is now in the regulator's court on lifting the bank.

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