Bank said there was impact on business volumes and collection efforts, as a result fees/other income were lower by Rs 450 crore in Q4FY20.
Country's largest private sector bank HDFC Bank on April 18 reported strong growth in earnings with every parameter showing double digits rise on year-on-year basis.
The growth was despite 10 days of lockdown (out of the total 40 days) seen in the March quarter, but the bank said there was impact on business volumes and collection efforts, as a result fees/other incomes were lower by Rs 450 crore in Q4FY20.
The bank has not proposed any final dividend for the year ended March 31, 2020, especially after the Reserve Bank of India, on April 17 said banks will not make any further dividend payouts from profits pertaining to the financial year until further instructions, with a view that banks must conserve capital in an environment of heightened uncertainty caused by COVID-19.
Here are key takeaways from earnings:
Profit
After providing Rs 2,246.6 crore for taxation, HDFC Bank earned a net profit of Rs 6,927.7 crore, an increase of 17.7 percent over the quarter ended March 2019.
Revenue
Bank's net revenue increased by 18.2 percent to Rs 21,236.6 crore for the quarter ended March 2020 YoY.
Net Interest Income and Net
Net interest income (interest earned less interest expended) for the quarter grew to Rs 15,204.1 crore from Rs 13,089.5 crore in same period last year, driven by 21.3 percent growth in advances and 24.3 percent in deposits. The net interest margin for the quarter was at 4.3 percent.
Other Income (Non-Interest Income)
Other income at Rs 6,032.6 crore was 28.4 percent of net revenue for the March quarter, rising by 23.84 percent over corresponding period previous year.
Among four components of other income, fees & commissions business increased by 14.61 percent YoY to Rs 4,200.8 crore, there was 147 percent increase in gain on sale/revaluation of investments at Rs 565.3 crore and miscellaneous income including recoveries and dividend grew by 33.49 percent to Rs 765.7 crore YoY.
Pre-Provision Operating Profit
HDFC Bank said its pre-provision operating profit at Rs 12,958.8 crore grew by 19.5 percent over the corresponding period of previous year. Operating expenses increased by 16.3 percent to Rs 8,277.8 crore YoY during the quarter, while cost-to-income ratio improved to 39 percent against 39.6 percent in same quarter last year.
Asset Quality
Gross non-performing assets were at 1.26 percent of gross advances as on March 2020 against 1.42 percent in December 2019 and 1.36 percent in March 2019. Net NPAs were at 0.36 percent of net advances as on March 2020 against 0.48 percent in December 2019 and 0.39 percent in March 2019.
While explaining the reason for lower NPAs, bank said it held provisions as on March 2020 against the potential impact of COVID-19 and the same are in excess of RBI prescribed norms. As a result, gross NPA and net NPA ratios were lower by 10 bps and 6 bps YoY respectively.
Provisions
Provisions and contingencies at the end of March quarter 2020 were at Rs 3,784.5 crore as against Rs 1,889.2 crore for the quarter ended March 2019.
Total provisions for the March quarter 2020 included credit reserves relating to COVID-19 in the form of contingent provisions of approximately Rs 1,550 crore.
Balance Sheet
HDFC Bank said total balance sheet size as of March 2020 was at Rs 15,30,511 crore, a growth of 23 percent over Rs 12,44,541 crore as of March 2019.
Total deposits increased by 24.3 percent to Rs 11,47,502 crore as of March 2020, with CASA deposits growing by 23.9 percent YoY. "Continued focus on deposits helped in the maintenance of a healthy liquidity coverage ratio at 132 percent, well above the regulatory requirement," bank said.
Advances as of March 2020 were Rs 9,93,703 crore, an increase of 21.3 percent over March 2019 with domestic advances rising 21.4 percent.
Capital Adequacy Ratio
Bank's total capital adequacy ratio was at 18.5 percent as of March 2020 against 17.1 percent in March 2019 and regulatory requirement of 11.075 percent.
"Common Equity Tier-1 capital ratio was at 16.4 percent as of March 2020," said the bank.
FY20 Earnings
Net revenue for the financial year ended March 2020 were Rs 79,447.1 crore, up by 20.6 percent over previous year and net profit at Rs 26,257.3 crore grew by 24.6 percent over FY19, while net interest income increased by 16.46 percent to Rs 56,186.25 crore compared to previous year.Time to show-off your poker skills and win Rs.25 lakhs with no investment. Register Now!
