Mumbai, Apr 18 (PTI) The country's largest private-sector lender, HDFC Bank, on Saturday reported an 8.04 per cent jump in its March quarter consolidated net profit to Rs 20,350.76 crore, but flagged near-term risks from the West Asia conflict for a segment of small-business borrowers.

The lender, which witnessed the surprise resignation of non-executive chairman Atanu Chakraborty over governance and ethics-related concerns recently, reported a 9.11 per cent jump in the standalone net profit to Rs 19,221.05 crore for the January-March period compared to the year-ago period.

The bank's chief executive and managing director Sashi Jagdishan refrained from making any further comments on the Chakraborty resignation saga, pointing to the pending report from an external legal agency.

He also declined to specify the time period for submitting the said report and added that the team has to go through voluminous data as part of its investigations into the matter.

Jagdishan, however, thanked the government, capital markets regulator Sebi and banking watchdog RBI for backing or favouring the bank following Chakraborty's resignation.

For the reporting quarter, the core net interest income grew 3.2 per cent to Rs 33,080 crore on the back of 12 per cent advances growth and the net interest margin coming at 3.38 per cent.

In what may be construed as a sign of a relook into a previously announced target to grow faster than the system in FY27, Jagdishan said things are very "nebulous" right now making it very difficult to offer any guidance.

Sections of small business or small and medium enterprises borrowers are likely to face the heat of the West Asia conflict in the first quarter, and it will take up to two months after the war ends for the same to settle down, he said.

He, however, asserted that the bank is witnessing no headwinds on its asset quality front and added that the overall momentum is very positive.

Meanwhile, Jagdishan, who's term is ending later this year, spoke about a potential reorganization in the bank's top level leadership soon which may see an expansion in the responsibilities of deputy MD Kaizad Bharucha.

When asked about Jagdishan's reappointment, Bharucha said that the nomination and remuneration committee of the board will take up the matter in due course but declined to specify any time lines for the same.

The non-interest income came at Rs 13,250 crore, and had an impact of the RBI's surprise measures to curb speculation in rupee, the bank management said.

In the background of practices at its Dubai International Financial Centre and specifically sale of additional tier-I bonds being among Chakraborty's concerns, Jagdishan cited a recent order which spoke of the investors not being uninformed ones.

He also claimed that domestically, its record on the misselling front is better than the industry.

On the asset quality front, the bank reported an improvement in the gross non-performing assets ratio at 1.15 per cent as against 1.24 per cent in the quarter-ago period.

The overall provisions declined to Rs 2,610 crore from Rs 3,193 crore in the March 2025 quarter. PTI AA MR

Asset quality and governance concerns shape HDFC Bank's strong quarterly profit update amid West Asia conflict risks. HDFC Bank reported higher quarterly net profit, with advances growth supporting core income, while also flagging near-term stress for some small-business and SME borrowers from the West Asia conflict. The bank said asset quality remained strong, provisions declined, and non-interest income was affected by RBI measures to curb rupee speculation. It also referred to governance and ethics-related concerns around the recent chairman resignation, an ongoing external legal review, and possible top-level leadership reorganisation.