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HDFC Bank reports 19.6% rise in Q1 profit
Private sector lender HDFC Bank on Saturday reported a 19.6% year-on-year (y-o-y) rise in net profit to Rs.6,659 crore for the three months to June owing to a rise in net interest income (NII) and lower tax outgo.
However, its profit was lower than Rs.6,809 crore estimated by a Bloomberg poll of 15 analysts.
The bank’s net interest income – difference between interest earned and interested expended – grew 17.8% y-o-y to Rs.15,665.4 crore. Its net interest margin -- a key measure of profitability – stood at 4.3%, unchanged from the same period last year.
HDFC Bank’s asset quality improved in the June quarter with gross bad loan ratio or the percentage of bad loans to total advances declining 4 bps y-o-y to 1.36%. Its net NPA ratio was also down 10 bps to 0.33% in Q1 FY21. However, compared to the March quarter of FY20, HDFC Bank’s gross bad loan ratio was up 10 bps.
The bank said in a statement that in line with the additional regulatory package guidelines dated 23 May, the bank granted a second three-month moratorium on installments or interest, as applicable, due between 1 June and 31 August.
“For all such accounts where the moratorium is granted, the asset classification shall remain stand still during the moratorium period (i.e. the number of days past-due shall exclude the moratorium period for the purposes of determining whether an asset is non-performing)," it said.
HDFC Bank also said that it holds provisions as at 30 June 2020 against the potential impact of covid-19 based on the information available at this point in time.
“The provisions held by the bank are in excess of the RBI prescribed norms," it said, without disclosing the quantum of provisions set aside for covid-19. Its total provisions stood at ₹3,891 crore, up 49% from the same period last year.
The bank’s total advances were at Rs.10.03 trillion in Q1 of FY21, an increase of 20.9% over the same period last year. The domestic retail loans grew 7.2% and domestic wholesale loans grew 37.6%, it said, adding that the domestic loan mix between retail and wholesale was 48:52. Overseas advances constituted 3% of total advances, the bank said.
Total deposits stood at Rs.11.89 trillion, an increase of 24.6% over 30 June last year. Its current and savings account (CASA) deposits grew 26% with savings account deposits at Rs.3.27 trillion and current account deposits at Rs.1.5 trillion. The bank said its CASA deposits now comprise 40.1% of total deposits as of 30 June, 2020.
HDFC Bank’s total capital adequacy ratio (CAR) as per Basel III guidelines was at 18.9% as on 30 June, as against a regulatory requirement of 11.075%, including the capital conservation buffer of 1.875%, and an additional requirement of 0.20% for being a Domestic Systemically Important Bank (D-SIB).
HDFC Bank Q4 profit rises 18%, asset quality improves
HDFC Bank, the country's largest lender by market cap, has reported a profit at Rs 6,927.69 crore for the quarter ended March 2020. It was lower than the average of estimates of analysts polled by CNBC-TV18 which was pegged at Rs 7,228.9 crore.
Net interest income, the difference between interest earned and interest expended, stood at Rs 15,204.06 crore for the quarter, against CNBC-TV18 poll estimates of Rs 14,972.7 crore.
The private sector lender registered a strong business growth during the quarter and continued to gained market share as deposits grew by 24.2 percent year-on-year (up 7.4 percent QoQ) to Rs 11,46,500 crore, the second best in last 15 quarters.
The bank immediately after the end of March quarter said advances aggregated to approximately Rs 9,93,000 crore as of March 2020, a growth of 21.2 percent as compared to Rs 8,19,400 crore as of March 2019 (Rs 9,36,000 crore as of December 2019).
CASA ratio stood at around 42 percent in March quarter as compared to 42.4 percent in year-ago period and 39.5 percent in previous quarter, it added.
During the quarter ended March 2020, HDFC Bank said it purchased loans aggregating Rs 5,479 crore through the direct assignment route under the home loan arrangement with parent company Housing Development Finance Corporation.
During the quarter, mutual funds increased their stake in the bank to 15.01 percent (from 14.38 percent in December quarter) and LIC also raised its stake to 3.04 percent from 2.74 percent in similar period.
HDFC Bank Q3 profit jumps 33%, but asset quality weakens, provisions spike
Private sector lender HDFC Bank on January 18 has registered a whopping 33 percent year-on-year growth in third quarter profit, driven by other income and operating income, but asset quality weakened along with deterioration in provision coverage ratio. Lower tax cost also boosted profitability.
Profit during the quarter increased to Rs 7,416.5 crore, from Rs 5,585.85 crore in same period last year.
Net interest income, the difference between interest earned and interest expended, grew by 12.7 percent to Rs 14,172.9 crore compared to year-ago with loan growth of 19.9 percent and deposits growth of 25.2 percent YoY.
CASA deposits in Q3 grew by 21.5 percent and time deposits increased by 27.7 percent YoY, the bank said, adding the continued focus on deposits helped in the maintenance of a healthy liquidity coverage ratio at 140 percent, well above the regulatory requirement.
Net interest margin for the quarter remained stable at 4.2 percent, it said.
Asset quality was weak with gross non-performing assets (NPA) as a percentage of gross advances rising 4bps QoQ to 1.42 percent and net NPA climbing 6bps QoQ to 0.48 percent in quarter ended December 2019.
But excluding the portion of agricultural segment, gross NPA remained flat at 1.2 percent QoQ.
Provisions and contingencies jumped 37.6 percent YoY (12.7 percent QoQ) to Rs 3,043.56 crore during October-December quarter.
"Numbers were slightly better and yes the asset quality and provisioning coverage ratio (PCR) weakened but the NPA is fine considering the seasonality factor (agricultural NPA)," Ravikant Bhat of IndiaNivesh told CNBC-TV18.
Siddharth Purohit of SMC Institutional Equities also agreed with Bhat, saying this quarter is always seasonally weak quarter in terms of asset quality, but the bank generally recovered the same in following quarters, so overall it is very good quarter and the market will take it positively. "I am okay with numbers."
Other income (non-interest income) increased significantly to Rs 6,669.28 crore for the quarter, up 35.5 percent YoY as its main component fees and commissions grew by 24.1 percent, said the HDFC Bank in its BSE filing.
Miscellaneous income including recoveries and dividend more than doubled to Rs 940.4 crore (from Rs 402.6 crore YoY) during the quarter as recoveries included one-off item of approximately Rs 200 crore arising from resolution fo a NCLT matter, it added.
Pre-provision operating profit (PPoP) grew by 20.1 percent year-on-year to Rs 12,945.41 crore in Q3FY20. The cost-to-income ratio for the quarter at 37.9 percent improved from 38.4 percent in same period last year.
Meanwhile, Keki Mistry, Chairman and Whole-Time Director, has relinquished his office as director of the bank, the lender said.
The board of directors duly approved the re-appointment of Malay Patel as an Independent Director and Kaizad Bharucha as an Executive Director, subject to the approval of the Reserve Bank of India and the
shareholders.
HDFC Bank Q2 profit jumps 27%,asset quality stable
Country's one of the largest private sector lender HDFC Bank has reported a healthy 26.75 percent year-on-year (YoY) growth in profit for the quarter that ended on September 2019 with stable asset quality.
Profit after tax for the quarter increased to Rs 6,345 crore against Rs 5,005.73 crore earned in the same period last year. The growth was driven by average asset growth of 15 percent and a core net interest margin for the quarter of 4.2 percent.
Net interest income during the quarter grew by 14.89 percent to Rs 13,515.04 crore YoY with loan growth at 19.5 percent as compared to same period last year.
Other income (non-interest income) increased significantly by 39.18 percent to Rs 5,588.72 crore in July-September quarter YoY while operating profit climbed 23.40 percent YoY to Rs 11,698.08 crore in Q2FY20.
Fees and commissions, which contributed more than 72 percent to other income, grew by 23 percent year-on-year to Rs 4,054.5 crore in Q2 and foreign exchange & derivatives revenue increased 31.4 percent to Rs 551.7 crore while gain on sale/ revaluation of investments stood at Rs 480.7 crore during the quarter ended September 2019 against loss of Rs 32.8 crore in the corresponding period last year.
Asset quality remained stable for the quarter with gross non-performing assets as a percentage of gross advances falling sequentially to 1.38 percent from 1.40 percent, and net NPA as a percentage of new advances declining to 0.42 percent against 0.43 percent QoQ.
HDFC Bank said provisions and contingencies increased sharply by 48.39 percent to Rs 2,700.68 crore in Q2 compared to year-ago period while the same grew by 3.33 percent QoQ.
HDFC Bank Q1 profit rises 21%
HDFC Bank Ltd on Saturday said its first quarter net profit rose 21% on account of higher provisions and other income.
The bank reported a net profit of ₹5,568.16 crore for the three months ended 30 June compared with ₹4,601.44 crore in the year-ago period.
Net interest income, or the difference between the interest earned on loans and paid on deposits, grew 22.9% year-on-year to₹13,294.3 crore in April-June. Other income, which includes core fee income, rose 27.2% to₹4,970.3 crore during the reporting quarter.
Asset quality deteriorated marginally as gross non-performing assets (NPAs), as a percentage of total advances, rose to 1.4% in the June quarter compared to 1.33% in the year-ago period.
Provisions during the quarter rose 60% to₹2,613.66 crore. In January-March, the bank had set aside ₹1,889.2 crore as provisions.
Post-provision, the net NPA ratio was at 0.43% against 0.39% in the March quarter and 0.41% in the year-ago period. The bank made specific loan loss and contingent provisioning of ₹2,413.5 crore as against₹1,432.2 crore for the corresponding quarter of the previous year. The bank also made general provisions of ₹200.2 crore, which includes additional provisions of ₹86 crore towards standard advances to the NBFC/HFC sector.
HDFC Bank's loan book saw year-on-year growth of 17% and deposits grew by 18.5%.
The board of directors has declared a special interim dividend of ₹5 per equity share of ₹2 to commemorate 25 years of the bank’s operations, the bank said in a press release.
HDFC Bank’s next boss needs to win 15-day challenge of Aditya Puri
HDFC
Bank MD Aditya Puri wants his successor to learn his job in just two weeks.
The head of India's largest private sector lender said his replacement, a
search for whom will begin soon, should be better than him in all respects. “If
my replacement wants to be mentored for 1 year, I don’t want that replacement,”
Puri said at the lender's annual general meeting.
Puri says his replacement should not require an 18-month handholding for the
job. India's highest paid bank chief, who turns 70 in October 2020, has been
credited with building India’s most valuable bank from scratch. He is also the
country’s longest serving bank chief, having headed the bank since its launch
in 1994.
HDFC
Bank’s steady growth and performance are widely attributed to Puri’s
no-nonsense leadership.
Speculation has been rife for many years on who would succeed Puri and it has
only intensified after he underwent a cardiac surgery in February 2016.
In May 2018, Puri said while speaking to analysts that the HDFC Bank board
would soon start the process of identifying his successor and the depth of
leadership within the bank would ensure a smooth transition. The plan was to
start the process of identifying a successor 18-24 months ahead of Puri’s
retirement, and the bank planned to have a 12-month overlap period when the
successor would work with Puri.
Only three months after that pronouncement, Puri’s most trusted lieutenant and
the heir apparent, Paresh Sukthankar, announced his sudden departure from the
bank, throwing open the succession race. The bank has till date not appointed a
replacement for Sukthankar.
In the annual general meeting, many shareholders expressed their desire that
Puri should continue beyond 70 and they were willing to support a
representation to the RBI.
Puri did not respond to representations from shareholders that they should be
given preferential allotment in an IPO of the bank’s NBFC arm HDB Financial
Services, stating that the reports of an IPO were speculative. Puri said that
branches continue to be relevant. However, the experience in branches may
change. He said that the bank was looking to add 800 branches in FY20, but
would continue to focus only on the Indian market. Puri rued that a slowdown in
one quarter is leading to “excessive pessimism” about the health of the overall
economy.
“Fundamentally, I think there is excessive pessimism about the rate of growth,
just because it has come down in one quarter,” he told the shareholders, many
of whom had asked questions on the macroeconomic worries.
He attributed the dip in economic growth to the general elections, and also
explained that the auto industry, which has been on a rough ride for almost a
year now, experiences a similar phenomenon every four years. The veteran banker
was referring to GDP growth sliding to a five-year low of 5.8% for the March
quarter and the full FY19 growth hitting a low of 6.8%. The comments come days
after Prime Minister Narendra Modi termed those questioning the economic
potential as “professional pessimists” and exuded confidence in the country
becoming a $5-trillion economic giant during the course of his government’s
second term itself. Puri said plans laid out by the government in the Budget
are “very good” and welcomed specific measures like overseas borrowing, higher
divestment target, reviving non-banking lenders, bankruptcy laws and also
getting excess capital from the RBI. He said there is a need to focus on
exports and manufacturing but pointed out that, unlike the
manufacturing-dependent China, “ours is a consumption-driven economy”.
