HDFC Bank reports 22.8% rise in Q4 net profit as provisions decline
Premium- Its provisions declined 29% y-o-y to ₹3,312 crore and the bank said that total provisions for the quarter under review includes contingent provisions of about ₹1,000 crore.
MUMBAI : Private sector lender HDFC Bank on Saturday reported a 22.8% year-on-year (y-o-y) rise in net profit to ₹10,055.2 crore for the three months to March owing to higher net interest income and lower provisions.
The bank’s net interest income, difference between interest earned and interest expended, grew 10.2% y-o-y to ₹18,872.7 crore. Its net interest margin, a key measure of profitability, stood at 4%, down 20 basis points (bps) y-o-y and 10 bps sequentially. Its provisions declined 29% y-o-y to ₹3,312 crore and the bank said that total provisions for the quarter under review includes contingent provisions of about ₹1,000 crore.
HDFC Bank’s other income growth was flat at 0.6% y-o-y to ₹7,637.1 crore. Analysts had expected hardening yields to hit treasury income of lenders in the March quarter.
In the March quarter, the four components of other income were fees and commissions of ₹5,630.3 crore, foreign exchange and derivatives revenue of ₹892.5 crore, and loss on sale and revaluation of investments of ₹40.3 crore and miscellaneous income, including recoveries and dividend, of ₹1,154.7 crore.
HDFC Bank’s asset quality improved in the March quarter with gross bad loan ratio or the percentage of bad loans to total advances declining 15 bps y-o-y and 9 bps sequentially to 1.17%%. Its net NPA ratio was also down 8 bps y-o-y and 5 bps quarter-on-quarter (q-o-q) to 0.32% in Q4 FY22.
The bank’s total advances were at ₹13.68 trillion in Q4 of FY22, an increase of 21% over the same period last year. Its retail loans grew 15.2%, and corporate and other wholesale loans grew 17.4%, it said. Overseas advances constituted 3.1% of total advances, the bank said.
Total deposits stood at ₹15.59 trillion, an increase of 17% over 31 March last year. Its current and savings account (CASA) deposits grew 22% with savings account deposits at ₹5.11 trillion and current account deposits at ₹2.39 trillion. The bank said its CASA deposits now comprise 48.2% of total deposits as of 31 March.
HDFC Bank’s total capital adequacy ratio (CAR) as per Basel III norms was at 18.9% as on 31 March, as against a regulatory requirement of 11.7%, including the capital conservation buffer of 2.5%, and an additional requirement of 0.2% for being a Domestic Systemically Important Bank (D-SIB).
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HDB Financial Services, the lender’s non-banking financial company (NBFC) arm, reported a profit after tax of ₹427.1 crore in Q4 FY22, down 17% from the same period last year. Its total loan book stood at ₹61,326 crore as on 31 March and stage-three loans or bad loans were at 4.99% of total advances. As on 31 March, HDFC Bank held a 95% stake in the non-bank financier.
Earlier, this month HDFC Bank announced it will take into its fold, promoter and mortgage lending behemoth Housing Development Finance Corp (HDFC) in a deal that would make the bank more competitive and allow access to a captive customer base to cross sell its products. The merger is expected to close in 18 months, subject to regulatory and other approvals.
Shares of HDFC Bank on BSE closed at ₹1,464.85 on Friday, down 1.9% from its previous close.