New Delhi, Jul 18 (PTI) HDFC Bank on Saturday reported a 5 per cent increase in standalone profit to Rs 19,060 crore for the June quarter.

The country's biggest private sector lender had earned a net profit of Rs 18,155 crore in the year-ago period.

However, the total income of the bank during the quarter under review dropped to Rs 92,184 crore from Rs 99,200 crore in the same period a year ago, HDFC Bank said in a regulatory filing.

The lender's interest income increased to Rs 79,363 crore from Rs 77,470 crore in the same quarter a year ago.

Welcoming new chairman Rajiv Kumar, HDFC Bank MD and CEO Sashidhar Jagdishan said the appointment has brought in a sense of stability.

Kumar, former Chief Election Commissioner and Finance Secretary, was appointed part-time chairman of the bank following the sudden resignation of Atanu Chakraborty effective March 18.

In his resignation letter, Chakraborty had said that "certain happenings and practices within the bank are not in congruence with my personal values and ethics".

This led to a sharp fall in share prices of the bank and concerns were raised about its corporate goverance.

Kumar had been instrumental in revitalising public sector banking and the financial sector as Secretary Department of Financial Services between 2017 and 2020.

Within a fortnight of Kumar joining the Department of Financial Services, accounts of about 3.38 lakh shell companies were frozen, hitting at the architecture of black money itself. Curbs on ponzy schemes followed.

During the period, operating profit of the bank declined to Rs 28,169 crore, as compared to Rs 35,734 crore in the same quarter a year ago.

Net interest income grew 7 per cent to Rs 33,530 crore from Rs 31,440 crore for the June quarter, it said.

Net interest margin was at 3.26 per cent on total assets, and 3 per cent based on interest earning assets.

On the outlook, Jagdishan said, "We are at the cusp of pushing peddle... the environment continues to be very healthy." About FCNR deposit mobilisation, he said the rates are attractive and the bank expects good flow by the September 30 deadline.

On the the CEO reappointment process, the bank's Deputy Managing Director Kaizad M Bharucha said the new chairman has just joined the board and, as and when the Governance, Nomination and Remuneration Committee (GNRC) takes a decision about the issue, it will be shared.

The three-year term of Jagdishan will come to an end on October 26, 2026.

The bank's asset quality exhibited improvement with gross non-performing assets (NPAs) declined to 1.17 per cent of gross advances at the end of the June quarter, from 1.4 per cent a year ago.

Similarly, net NPAs, or bad loans, declined to 0.41 per cent, as against 0.47 per cent in the year-ago period.

As a result, provisions and contingencies for bad loans declined massively to Rs 3,060 crore during the first quarter, as compared to Rs 14,442 crore in the same period a year ago.

Capital adequacy ratio of the bank moderated to 19.57 per cent from 19.88 per cent at the end of the first quarter of the previous financial year.

The consolidated profit after tax of the HDFC Bank Group for the June quarter was Rs 19,245 crore as against Rs 16,258 crore a year earlier, registering an 18 per cent growth.

The bank's consolidated net revenue was Rs 85,480 crore for the June quarter, it said. PTI DP TRB

Corporate governance and asset quality improvements accompany stronger banking profitability amid continuing leadership reappointment considerations. Banking-sector performance reporting records higher profitability, improved asset quality and lower provisions for bad loans, although operating profit declined and capital adequacy moderated. Corporate governance developments include appointment of a part-time chairman following the former chairman's resignation and concerns about internal practices. The chairman's prior financial-services role was associated with actions against shell companies and ponzi schemes targeting black-money structures. Reappointment of the managing director and chief executive officer remains subject to committee consideration.