HDFC Bank net rises 19.6% year-on-year on back of higher income

The net interest margin (NIM) in Q1 stood unchanged on a sequential basis at 4.3%.

HDFC Bank on Saturday reported a 19.6% year-on-year (y-o-y) growth in net profit for the quarter ended June to Rs 6,659 crore on the back of a 17.8% y-o-y rise in net interest income (NII) to Rs 15,665 crore. In a statement, HDFC Bank said provisions and contingencies for the quarter were Rs 3,891.5 crore, up 49% y-o-y, and consisting of specific loan loss provisions of Rs 2,739.8 crore and general provisions and other provisions of Rs 1,151.7 crore. In the same quarter a year ago, provisions stood at Rs 2,613.7 crore, including specific loan loss provisions of Rs 2,248 crore and general provisions and other provisions of Rs 365.7 crore. “Total provisions for the current quarter included contingent provisions of approximately Rs 1,000 crore. The core credit cost ratio was 1.08%, as compared to 0.77% in the quarter ending March 31 and 1.07% in the quarter ending June 30, 2019,” the bank said.

The net interest margin (NIM) in Q1 stood unchanged on a sequential basis at 4.3%. Pre-provision operating profit (PPOP) at Rs 12,829.3 crore grew by 15.1% over the corresponding quarter of the  previous year. Asset quality performance was a mixed bag, with the gross non performing asset (NPA) ratio rising 10 basis points (bps) sequentially to 1.36% and the net NPA ratio down by three bps to 0.33%.

Total advances grew 21% y-o-y to Rs 10.03 lakh crore at the end of June. In a near-inversion from the previous quarter, the mix between retail and wholesale loans stood at 48:52. While retail advances grew only 7.2%, wholesale loans grew 37.6%.

Total deposits as on June 30 were Rs 11.89 lakh crore, an increase of 24.6% over June 30, 2019. Current account savings account (CASA) deposits grew 26%, with SA deposits at Rs 3.27 lakh crore and CA deposits at Rs 1.5 lakh crore. Time deposits stood at Rs 7.12 lakh crore, an increase of 23.7% over the previous year. The CASA ratio fell to 40.1% from 42.2% at the end of March.

HDFC Bank’s total capital adequacy ratio (CAR) as per Basel III guidelines was at 18.9% as on June 30, 2020, up from 16.9% on June 30, 2019, and as against a regulatory requirement of 11.075%. The CAR includes capital conservation buffer (CCB) of 1.875% and an additional requirement of 0.2% on account of the bank being identified as a domestic systemically important bank (D-SIB). Tier 1 CAR was at 17.5% as of June 30, 2020, compared to 15.6% as of June 30, 2019. Common equity tier 1 (CET 1) ratio was at 16.7% as of June 30, 2020. Risk-weighted assets were at Rs 10.11 lakh crore, up from Rs 9.66 lakh crore on June 30, 2019.