HDFC Bank, the largest private sector lender in India, on April 16 reported a 23 percent year-on-year (YoY) growth in standalone net profit at Rs 10,055.2 crore for the quarter ended March 2022 as bad loans provisions declined 29 percent, with further improvement in asset quality.
A year back, the standalone profit stood at Rs 8,186.51 crore.
Net interest income (NII), the difference between interest earned and interest expended, increased 10.2 percent YoY to Rs 18,872.7 crore in Q4, with credit growth of nearly 21 percent and 16.8 percent growth in deposits YoY. "Core net interest margin was at 4 percent on total assets, and 4.2 percent based on interest-earning assets, said the bank in its BSE filing on April 16.
HDFC Bank further said its advances grew by 20.8 percent YoY to Rs 13.69 lakh crore in the fourth quarter of FY22, with growth in retail loan book at 15 percent, commercial and rural banking loans at 30.5 percent, and corporate and other wholesale loans at 17.5 percent over the corresponding period last fiscal.
The bank recorded a 16.8 percent YoY growth in deposits at Rs 15.59 lakh crore as of March 2022, with retail deposits rising 18.5 percent, and wholesale deposits scaling 10 percent on-year.
The share of Current Account Savings Accounts (CASA) deposits stood at Rs 7.51 lakh crore as of March 2022, a growth of around 22 percent YoY, while the ratio of CASA deposits increased to 48 percent in the March 2022 quarter, compared to 46.1 percent in the corresponding period last fiscal, the bank said.
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Provisions and contingencies fell sharply to Rs 3,312.4 crore at the end of the March 2022 quarter, down 29.4 percent compared to the year-ago period, but the same increased 10.6 percent on a sequential basis.
Total provisions for March 2022 quarter included contingent provisions of approximately Rs 1,000 crore, said the bank, adding the floating provisions were Rs 1,451 crore and contingent provisions at Rs 9,685 crore as of March 2022.
Asset quality improved further with the gross non-performing assets (as a percentage of gross advances) falling 9 bps QoQ to 1.17 percent and net NPAs (as a percentage of net advances) declining 5 bps sequentially to 0.32 percent at the end of the March quarter.
Non-interest income (or other income) grew by around half a percent to Rs 7,637 crore in Q4FY22 as there was a loss on sale or revaluation of investments during the quarter at Rs 40.3 crore (against income of Rs 655.1 crore in the same period last year, said the bank.
The fees and commissions segment, which contributed 74 percent to other income, grew by 12 percent to Rs 5,630.3 crore in the same period.
Pre-provision operating profit (PPoP) at Rs 16,357 crore registered a 5.3 percent YoY growth compared to the corresponding quarter of last fiscal as operating expenses increased by 10.6 percent YoY.
The bank said its total capital adequacy ratio (CAR) stood at 18.9 percent as of March 2022, up from 18.8 percent as of the same period last year, with Tier-I CAR at 17.9 percent increasing by 30 bps YoY.
During the quarter ended March 2022, the bank purchased loans aggregating Rs 8,117 crore through the direct assignment route under the home loan arrangement with Housing Development Finance Corporation (HDFC).
For the full financial year 2021-22, the bank reported a profit of Rs 36,961.3 crore, a growth of 18.8 percent over the previous year, and net interest income at Rs 72,009.6 crore - up 11 percent during the same period.
On April 4 this year, the board of directors approved the merger of HDFC with HDFC Bank. The combined entity in terms of market capitalisation would be the third-largest in India, which is subject to several requisite approvals, including that from the Reserve Bank of India, Competition Commission of India, National Housing Bank, and Insurance Regulatory and Development Authority of India. HDFC shareholders will get 42 equity shares of HDFC Bank for every 25 shares held by them.
The private sector lender added 563 branches during the March quarter, taking the network to 6,342 units as of the end of FY22.HDFC Bank's share price has slipped 1 percent in the current calendar year (2022) and gained 2.4 percent during the last year, thereby underperforming BSE Sensex in both periods. The benchmark Sensex rose 0.14 percent and 19.5 percent, respectively.