HDFC Bank, India’s largest private sector lender, reported an 18.5% year-on-year jump in net profit to Rs 12,259.50 crore in the quarter ended December, with strong growth coming from both the deposit and the credit counters.

The lender’s net interest income (NII) rose 24.6% YoY to Rs 22,987.9 crore from Rs 18,443.50 crore in the year-ago quarter.

Asset Quality

The bank’s gross non-performing assets (NPAs) stood at 1.23% of gross advances as on 31 December 2022, compared to 1.26% a year ago. In the preceding quarter, it was at 1.23%.

Net NPAs were at 0.33% of net advances as of 31 December 2022, compared to 0.37% in the same quarter of the previous fiscal. 

Provisions

Provisions lowered to Rs 2,806.4 crore in the December 2022 quarter, from 

Rs 3,240.1 crore in Q2FY23 and Rs 2,994 crore in the year-ago quarter. 

The bank has, thus, cut down its provisions by 6.26% on YoY basis and 13.40% on quarter-on-quarter basis.

Revenue

Net revenue for the quarter grew 18.3% YoY to Rs 31,487.7 crore. Excluding net trading and mark to market income, the net revenue grew by 22.1% over the year-ago period.

The bank earned Rs 6,052.6 (Rs 5,075.1 crore in the same quarter of the previous fiscal) from fees & commissions, Rs 1,074.1 crore (Rs 949.5 crore in the corresponding quarter of the previous year) from foreign exchange & derivatives revenue of Rs 1,074.1 crore, net trading and mark to market income of  Rs 261.4 crore (Rs 1,046.5 crore in the corresponding quarter of the previous year) and miscellaneous income, including recoveries and dividend, of Rs 1,111.8 crore (Rs 1,112.5 crore in the corresponding quarter of the previous year). Other income, excluding net trading and mark to market income, grew by 15.4% over the earlier year.

The cost-to-income ratio for the quarter was at 39.6%.

The total credit cost ratio was at 0.74%, as compared to 0.94% for the year-ago quarter 

Advances

The bank’s loan book grew 19.5% YoY to Rs 1,506,809 crore in the October-December quarter. Domestic retail loans grew 21.5% and commercial and rural banking loans by 30.2% YoY. Corporate and other wholesale loans grew by 20.3%. 

Deposits

Total deposits increased by 19.9% to Rs 1,733,204 crore in the quarter ended December 2022, from Rs 1,445,918 crore a year ago.

Current account savings account (CASA) deposits grew 12% with savings account deposits at Rs 5,35,206 crore and current account deposits at Rs 2,27,745 crore.

Time deposits grew to Rs 9,70,253 crore, up 26.9% over the year-ago quarter. 

Cheaper CASA deposits comprised 44% of total deposits as of December 31, 2022.

Capital adequacy

The bank’s capital adequacy ratio (CAR) was at 19.4% as on December 31, 2022 compared to 19.5%. Tier 1 capital adequacy ratio (CAR) stood at 17.2% compared with 18.4%. Common equity tier 1 capital ratio was at 16.4% and risk-weighted assets were at Rs 1,536,272 crore as against Rs 1,267,426 crore.

Branches

As of 31 December 2022, the bank had a distribution network of 7,183 branches and 19,007 ATMs / cash deposit and withdrawal machines (CDMs) across 3,552 cities. Around 51 % of the bank’s  branches are in semi-urban and rural areas.