HDFC Bank NPAs rise amid Q3 agriculture loan defaults

The lender's profit growth was weighed down by asset quality issues and slow loan growth

- Anshika Kayastha

In a quarter of otherwise stable financials, HDFC Bank Ltd's asset quality put a dampener on its earnings with non-performing assets rising, owing to an increase in agriculture loan slippages.

The country's largest private sector lender attributed this deterioration in loan quality to cyclical impact of the agriculture segment and said that the bank's focus continues to be on deposit mobilisation and improving its loan-to-deposit ratio (LDR).

The slippage ratio for the current quarter was 35 basis points (bps) amounting to around ₹8,800 crore. Excluding agriculture loans, this ratio was around 26 bps, flat from the previous quarter, chief financial officer Srinivasan Vaidyanathan said in the bank's earnings call.

"Excluding agriculture loans, because in June and December quarters you see the crop season impact, the slippages were flat," Vaidyanathan said.