HDFC Bank, the country's largest private sector lender, reported an 18.2 percent year-on-year (YoY) growth in its standalone profit at Rs 8,186.5 crore for the quarter ended March 2021 (Q4FY21) on account of low base in the corresponding period. The profit in Q4FY20 stood at Rs 6,927.69 crore.
Higher other income and pre-provision operating profit aided profitability during the quarter, but provisions and tax expenses restricted net income growth.
Net interest income (NII), the difference between interest earned and interest expended, grew 12.6 percent to Rs 17,120.15 crore in Q4FY21, compared to Rs 15,204.06 crore in the year-ago period, driven by credit growth of 14 percent, and core net interest margin of 4.2 percent for the quarter.
The net interest margin in the year-ago period stood at 4.3 percent and 4.2 percent in Q3FY21.
The domestic retail loan grew by 6.7 percent and wholesale loans grew by 21.7 percent YoY, while total deposits for the quarter came in at Rs 13,35,060 crore, up 16.3 percent over the corresponding period of the previous fiscal, with CASA (Current Account Saving Account) deposits growing 27 percent YoY, said the bank in its BSE filing.
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The cost-to-income ratio for the quarter was at 37.2 percent, as against 39 percent in the year-ago quarter, the bank added.
The pre-provision operating profit expanded to Rs 15,532.77 crore during the quarter under review, up 19.9 percent YoY.
On the asset quality front, the bank said gross non-performing assets (NPAs) as a percentage of gross advances were at 1.32 percent in Q4FY21, against 1.38 percent (proforma approach) as of December quarter 2020, and 1.26 percent as of March quarter 2020. Net NPAs were at 0.40 percent for the March quarter, it added.
The reported provisions and contingencies for the March quarter stood at Rs 4,693.7 crore, an increase of 24 percent compared to the corresponding period last year and 37.5 percent over the previous quarter.
HDFC Bank said it continued to hold provisions as of March 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.
The bank held floating provisions of Rs 1,451 crore and contingent provisions of Rs 5,861 crore as of March 2021. "Total provisions were 153 percent of the gross non-performing loans as of March 2021."
Non-interest income (other income) at Rs 7,593.91 crore in Q4FY21 surged 25.9 percent year-on-year, as fees & commissions (66 percent to other income) and foreign exchange and derivatives revenue grew 19.6 percent each YoY.
Gain on sale or revaluation of investments, and miscellaneous income including recoveries and dividend, which both are part of other income, increased 15.9 percent and 35.3 percent, respectively during the quarter on a YoY basis.
Tax expenses for the quarter increased 18.1 percent YoY to Rs 2,652.56 crore.
HDFC Bank said it would not make any dividend payment for the financial year ended March 2021 due to the second wave of COVID-19.