HDFC Bank, India’s largest private sector lender, reported an 18.2% rise in its fiscal fourth quarter net profit to Rs 8,186.51 crore over the year-ago period on the back of robust loan growth and stable asset quality.
Net interest income (difference between interest earned through lending and interest paid to depositors) grew 12.6% to Rs 17,120.2 crore in the fourth quarter of FY21, from Rs 15,204.1 crore a year ago. This was led by advances growth of 14% and core net interest margin of 4.2% during the period under review.
The net interest margin in the year-ago period stood at 4.3 % and 4.2% in Q3FY21.
Total advances for the quarter ended 31 March 2021 rose 14% to Rs 1,132,837 crore over the corresponding period of the previous year. Domestic retail loans grew 6.7% while domestic wholesale advances rose 21.7% year-on-year. Retail loans comprised 47% of the bank’s total loans while wholesale loans accounted for the balance 53%. Overseas advances constituted 3% of the total advances.
Total deposits for the reporting quarter stood at Rs 13,35,060 crore, up 16.3% over the corresponding period of the previous fiscal. CASA (current account saving account) deposits grew 27% YoY.
The bank’s net revenues (net interest income plus other income) increased 16.4% to Rs 24,714.1 crore for the quarter ended 31 March 2021, from Rs 21,236.6 crore a year ago.
Other income (non-interest revenue) at Rs 7,593.9 crore was 30.7% of net revenues. It grew 25.9% over Rs 6,032.6 crore in the corresponding quarter ended 31 March 2020.
Total balance sheet size expanded by 14.1% to Rs 1,746,871 crore at the end of March 2021 against Rs 1,530,511 crore a year ago. Total credit-to-cost ratio was at 1.64 % as against 1.51 % in the corresponding quarter of the previous fiscal. Provisions and contingencies stood at Rs 4,693.7 crore as against Rs 3,784.5 crore in the same quarter of the previous fiscal.
On the asset quality front, the bank’s gross non-performing assets (GNPAs) grew to Rs 15,086 crore during the fiscal under review from Rs 12,649.97 crore. GNPAs were 1.32% of gross advances versus 1.26% a year ago.
HDFC Bank saw its net non-performing assets (NNPAs) rise to Rs 4,554.82 crore in FY21 from Rs 3,542.36 crore in the earlier year.
Meanwhile, considering the potential impact of Covid-19, HDFC Bank said that it is holding provisions in excess of the RBI prescribed levels. As of 31 March 2021, bank's floating provisions stood at Rs 1,451 crore and contingent provisions at Rs 5,861 crore. Total provisions were 153% of the GNPAs at the end of FY21, the lender said.
Amid the second wave of Covid-19 cases, HDFC Bank said its board has decided not to offer a final dividend for FY21 in view of the persisting uncertainty.
“Retail growth remained sluggish at 8% versus the system growth of 9% due the bank's cautious stance suspension of the new card acquisition and part sell off of the portfolio. Retail growth could remain lacklustre due to localised lockdown but the corporate growth remains healthy at 22% as the bank continues to capture the market share from the public sector banks. It expects the corporate capex cycle to revive from the second half of FY22 with early signs capex visible in select sectors like the auto-ancillary food industry, pharma and metals,” Emkay said in a report.
