HDFC Bank Q4 net profit rises 23% to Rs 10,055 crore

HDFC Bank on Saturday reported a 22.8% year-on-year (y-o-y) growth in net profit for the quarter ended March to Rs 10,055 crore on the back of a 29% y-o-y fall in provisions to Rs 3,312.35 crore.

The country’s largest private bank saw its net interest income (NII) growing 10.2% to Rs 18,872.7 crore, while non-interest income grew just 0.6% y-o-y to Rs 7,637 crore due to losses and revaluation of assets in the investment book. A rise in bond yields during the fourth quarter was expected to hit banks’ treasury books.

The four components of other income for the quarter ended March 31 were fees and commissions of Rs 5,630.3 crore, foreign exchange and derivatives revenue of Rs 892.5 crore, loss on sale/revaluation of investments of Rs 40.3 crore and miscellaneous income, including recoveries and dividend, of Rs 1,154.7 crore.

The core net interest margin (NIM) in Q4 fell 10 basis points (bps) from the previous quarter to 4%.

This is among the lowest margin figures ever posted by HDFC Bank.

Total advances as on March 31 stood at Rs 13.69 trillion, up 21% over March 31 last year. Retail loans grew 15.2%, commercial and rural banking loans grew 30.4% and corporate and other wholesale loans grew 17.4%. Overseas advances constituted 3% of total advances.

Total deposits as on March 31 were Rs 15.59 trillion, an increase of 17% over March 31, 2021. Current account savings account (CASA) deposits grew 22% y-o-y, with SA deposits at `5.12 trillion and CA deposits at Rs 2.39 trillion. Time deposits stood at Rs 8.08 trillion, an increase of 12.3% over the previous year. The CASA ratio stood at 48.2%, up from 46.1% for the corresponding quarter a year ago.

The bank held floating provisions of Rs 1,451 crore and contingent provisions of Rs 9,685 crore as on March 31, 2022. Total provisions, including specific, floating, contingent and general provisions, were 182% of the gross non-performing loans as on March 31, 2022.

The gross non-performing asset (NPA) ratio fell nine basis points (bps) sequentially to 1.17% as on March 31, 2022, while the net NPA ratio fell five bps to 0.32%.

The bank’s total capital adequacy ratio (CAR) as per Basel III guidelines was at 18.9% as on March 31, 2022, (18.8% as on March 31, 2021) as against a regulatory requirement of 11.7%, which includes capital conservation buffer of 2.5%, and an additional requirement of 0.20% on account of the bank being identified as a domestic systemically important bank (D-SIB).

Tier 1 CAR was at 17.9% as of March 31, 2022, compared to 17.6% as of March 31, 2021. Common equity tier 1 capital ratio was at 16.7% as of March 31. Risk weighted assets were at Rs13.53 trillion, as againstRs11.31 trillion as on March 31, 2021.

The bank’s NBFC subsidiary HDB Financial Services posted a net profit of `427 crore in Q4FY22, down 17% y-o-y. Its total loan book grew 4% y-o-y to Rs 61,326 crore as on March 31, 2022. Stage 3 loans, denoting the ratio of bad assets, were at 4.99% of gross loans, down from 6.05% in the December quarter.

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