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HDFC Bank adds 2,700 employees in Q2; opens only 14 branches from Apr-Sep

This brought the total employee base to 86,450 at the end of September.

October 24, 2017 / 10:33 PM IST

As job cuts and slowing economy reined this bitter season, country's second largest private lender added a total of 2,700 new employees during the July to September period on higher business growth.

This brought the total employee base to 86,450 at the end of September.

The bank's employee cost, however, grew by a tad 3.5 percent.

The Mumbai-based bank had rationalised its staff count in the previous year by reducing its total employee base to a low of 83,750 as on June 2017, as against a peak of 95,002 as on September end last year.

A massive move in a single quarter, HDFC Bank had trimmed its workforce by 4,581 employees from October to December last year to bring efficiencies in the system amid weak growth.

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Paresh Sukthankar, Deputy Managing Director at HDFC Bank in a post results press conference told reporters, "We saw a reversal in our hiring as we added 2,700 people. On one hand we are driving growth on increased productivity and efficiency as I said earlier, on the other we are seeing increasing business volumes across products and wider geographies. So wherever we require to increase headcount, we are adding people."

The bank also grew slower in its branch network adding only 14 branches in this fiscal year since April with network at 4729 branches.

This helped the bank reduce its core cost-to-income ratio for the quarter to 42.6 percent as against 45.9 percent from a year back.

Sukthankar said they added about 180 branches in the last one year and plan to go slow on physical expansion adding about 150-200 branches on an annual basis as against earlier 300-400 few years ago.

HDFC Bank Q2 results

HDFC Bank on Tuesday reported a 20 percent jump in its September quarter net profit at Rs 4,151 crore on the back of higher net interest income and other income.

As it bounced back from its slowest ever quarterly profit growth of 15 percent in December, with its focus on retail clients and relatively smaller, medium segments and working capital exposure to segments such as infrastructure financing, HDFC Bank has continued to maintain lowest bad loan ratio among top banks.

The "too big to fail bank" is growing its loan book by with existing corporate borrowers, especially in the mid-sized segment which it brands as "emerging corporates".

"On the retail side we've seen pretty strong growth across products," Sukthankar added.

HDFC Bank also declared that the Reserve Bank of India (RBI) had made "certain observations" about a loan exposure to an unnamed borrower, which it had made as part of a consortium and was being restructured, adding it had made sufficient provisions even as discussions continue.

Provisions and contingencies surged 97.09 percent to Rs 1,476 crore while on a quarterly basis, they declined 5.3 percent.

As a percentage of total loans, gross non-performing assets (NPAs) rose to 1.26 percent as compared to 1.24 percent in the previous quarter and 1.02 percent in the year-ago quarter.

Net NPAs were at 0.43 percent in the September quarter compared to 0.44 percent in the previous quarter and 0.3 percent in the same quarter last year.

Gross NPAs stood at Rs 7,703 crore, up 52 percent from Rs 5,069 crore a year ago.

Advances for the quarter grew 22.34 percent from a year ago while deposits went up by 16.5 percent.

Sukthankar said, "The overall macro environment is obviously challenging for the players who are still strained in terms of their balance sheets... As you see a stronger continued consumption growth and if the markets then allow some of the entities to go for some asset sale or raise equity to deleverage, that might ease some pressure on asset quality.

"Otherwise it would be a gradual improvement, a bit of grind. I am hopeful things will get better in the next couple of quarters," he added.
Beena Parmar
TAGS: #Companies
first published: Oct 24, 2017 10:33 pm

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