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HDFC Bank, India's largest private lender, beat analysts' forecasts for July-September profit on Saturday, helped by higher core lending income, while margins were slightly lower on a sequential basis.

The Mumbai-based lender posted a standalone net profit of 168.21 billion rupees ($2 billion) for the second financial quarter, up 4% from the previous quarter.

That was above analysts' average forecast of 164.37 billion rupees, according to LSEG data.

HDFC Bank merged with parent HDFC in July 2023.

The bank's net interest income - the difference between interest earned and paid - rose nearly 1% from the previous quarter to 301.1 billion rupees.

Core net interest margin was 3.46% on total assets and 3.65% on interest-earning ones, versus 3.47% and 3.66%, respectively, in the previous quarter.

In the merger, HDFC Bank added a large pool of loans to its portfolio but a much smaller amount of deposits, putting it under pressure to increase the pace at which it raises deposits or to slow loan growth.

HDFC Bank's gross loans rose 1.3% sequentially, while deposits rose 5.1% to 25 trillion rupees.

The bank's provisions for bad loans and other contingencies rose to 27 billion rupees during the quarter from 26.02 billion rupees in the three months to June.

Its gross non-performing assets ratio was at 1.36% at the end of September, compared with 1.33% three months earlier.

($1 = 84.0650 Indian rupees)