HDFC Bank net up 18% on higher other income

On a proforma basis, the gross NPA ratio fell four bps from 1.36% at the end of December 2020.

HDFC Bank on Saturday reported an 18.2% year-on-year (y-o-y) growth in net profit for the quarter ended March to Rs 8,186.51 crore on the back of a 26% y-o-y rise in other income to Rs 7,594 crore, with net interest income (NII) growing 12.6% y-o-y to Rs 17,120 crore.

The bank’s provisions rose 24% y-o-y to Rs 4,693.7 crore. In a statement, HDFC Bank said the total provisions for the current quarter include approximately Rs 1,300 crore in contingent provisions. The bank’s gross non-performing asset (NPA) ratio in Q4 rose 41 basis points (bps) sequentially to 1.32% and the net NPA ratio rose 31 bps to 0.4% as the Supreme Court vacated a stay on recognition of bad loans after August 31, 2020. On a proforma basis, the gross NPA ratio fell four bps from 1.36% at the end of December 2020.

“The bank also continues to hold provisions as on March 31, 2021, against the potential impact of Covid-19 based on the information available at this point in time and the same are in excess of the RBI prescribed norms,” HDFC Bank said.

It held floating provisions of Rs 1,451 crore and contingent provisions of Rs 5,861 crore as on March 31, 2021. Total provisions — comprising specific, floating, contingent and general provisions — were 153% of gross NPAs as on March 31, 2021. The core net interest margin (NIM) in Q4 stood unchanged on a sequential basis at 4.2%.

Total advances as on March 31, 2021, were Rs 11.33 lakh crore, up 14% over March 31, 2020. Domestic advances grew 14.1% y-o-y. Domestic retail loans grew 6.7% and domestic wholesale loans grew by 21.7%. The domestic loan mix as per Basel 2 classification between retail:wholesale was 47:53. Overseas advances constituted 3% of total advances.

Total deposits as of March 31, 2021 were Rs 13.35 lakh crore, up 16.3% over March 31, 2020. Current account savings account (CASA) deposits grew 27%, with SA deposits at Rs 4.03 lakh crore and CA deposits at Rs 2.12 lakh crore. Time deposits stood at Rs 7.19 lakh crore, an increase of 8.5% over the corresponding quarter of the previous year. The CASA ratio was 46.1%, as against 42.2% a year ago.

The lender’s total capital adequacy ratio (CAR) as per Basel III guidelines was at 18.8% as on March 31, 2021, up from 18.5% as on March 31, 2020, and as against a regulatory requirement of 11.075%. Tier-1 CAR was at 17.6% as of March 31, 2021, compared to 17.2% as of March 31, 2020. The common equity tier-1 (CET-1) ratio was at 16.9% as of March 31, 2021. Risk-weighted assets were at Rs 11.31 lakh crore, as against Rs 9.95 lakh crore as on March 31, 2020.

The bank’s NBFC subsidiary HDB Financial Services posted a net profit of Rs 502.8 crore in Q4FY21, down 51.4% from Rs 1,037 crore in Q4FY20. The company’s provisions and contingencies for the quarter were at Rs 613 crore, up 56% y-o-y. The total loan book was Rs 58,947 crore as on March 31, 2021, up 5.4% from Rs 55,930 crore as on March 31, 2020. As on March 31, 2021, the gross NPA ratio based on the approach used for non-bank lenders was 3.9%, up from 3.5% on March 31, 2020 and down from 5.9% as per the proforma approach as on December 31, 2020.