HDFC Bank Q4 beats estimates; Top 10 takeaways from March quarter results

 

HDFC Bank reported yet another strong quarter amid demonetisation woes, a slowdown in credit demand as well as rising concerns of non-performing assets on Friday.  

 

HDFC Bank reported 18.25 percent year-on-year (YoY) rise in net profit to Rs3,990.09 crore which was higher than the CNBC-TV18 estimate of Rs 3,966.60 crore. The private sector bank reported a net profit of Rs3374.22 crore in the year-ago period. 

 

 

NII which is the interest earned less interest expended for the quarter ended March 31 grew by 21.5 percent to 9,055.10 crore which was higher than the CNBC-TV18 estimate of Rs8684.40 crore, driven by average asset growth (loan growth) of 19 percent and a core net interest margin for the quarter of 4.3 percent. It reported an NII of Rs 7453.30 crore in the corresponding quarter of last fiscal. 

 

 

Other income (non-interest revenue) at Rs 3,446.30 crore was 27.6 percent of the net revenues for the quarter ended March 31 grew by 20.3 percent to Rs 2865.90 crore reported in the corresponding quarter of last fiscal. 

 

 

Operating expenses for the quarter ended March 31 rose 13.9 percent to Rs 5,220 crore for the quarter ended March 31, compared to Rs 4584.30 crore reported in the year-ago period. The core cost-to-income ratio for the quarter was 42.4 percent compared to 44.9 percent reported in the corresponding quarter of last fiscal. 

 

 

Provisions and contingencies for the quarter ended March 31 came at Rs 1261.8 crore which consisted of specific loan provision of Rs 977.9 crore, the general provision of Rs 280.3 crore and other provisions of Rs 3.6 crore. 

 

The bank recorded provisions of Rs 662 crore in the year-ago period. The specific loan provisions for the quarter ended March 31, 2017, include provisions on account that would have turned non-performing assets during the December quarter. 

 

 

Total deposits saw a surge of 17.8 percent for the quarter ended March 31 to Rs 643640 crore. The current account deposits grew by 30.7 percent over the previous year to reach Rs 115,574 crore and saving account deposits grew by 30.9 percent over the previous year to reach Rs 193579 crore. 

 

 

The Bank’s total capital adequacy ratio (CAD) as per Basel III guidelines stood at 14.6 percent as of quarter ended March 31 as against a regulatory requirement of 10.25 percent.

 

The board of directors recommended a dividend of Rs 11/share of Rs 2 each for the year ended March 31, 2017, as against Rs 9.50 per equity share provided in the year-ago period. This would be subject to the approval by the shareholders at the next annual general meeting. 

 

 

As of March 31, the banks’ total distribution network stood at 4715 branches and 12,260 ATMs in 2657 cities/towns as against 4520 branches and 12000 ATM’s in 2587 cities in the year-ago period. 

 

 

Gross non-performing assets stood at 1.05 percent of gross advances as on March 31, compared to 1.05 percent as on December 31, 2016 and 0.94 percent as on March 31, 2016. The net non-performing assets were 0.3 percent as of net advances as on March 31, 2017.

 

 

The Bank’s domestic loan portfolio at Rs 538642 crore as of March 31, grew by 23.7 percent over March 31, 2016. The domestic retail loans and wholesale loans grew by 26.6 percent and 20.7 percent respectively, with the domestic loan mix between retail and wholesale at 53:47.