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Saturday, February 29, 2020

Q3: HDFC Bank posts 32.8% growth in net profit, marginal rise in gross NPAs

Other income (non-interest revenue) at Rs 6,669.3 crore was 32 per cent of the net revenues for the recently ended quarter, as against Rs 4,921 crore in the corresponding quarter ended December 2018.

By: ENS Economic Bureau | Mumbai | Published: January 19, 2020 1:54:48 am
HDFC, subsidiary get approvals for acquiring majority stake in Apollo Munich Net interest income (interest earned less interest expended) for the quarter ended December 2019 grew to Rs 14,172.9 crore from Rs 12,576.8 crore a year ago, driven by growth in advances of 19.9 per cent and a growth in deposits of 25.2 per cent. (File)

HDFC Bank, India’s most valuable lender, has posted a net profit of Rs 7,416.5 crore for the quarter ended December 2019 as against Rs 5,585.85 in the same period last year — an increase of 32.8 per cent.

Net interest income (interest earned less interest expended) for the quarter ended December 2019 grew to Rs 14,172.9 crore from Rs 12,576.8 crore a year ago, driven by growth in advances of 19.9 per cent and a growth in deposits of 25.2 per cent.

The net interest margin for the quarter remained stable at 4.2 per cent.

Other income (non-interest revenue) at Rs 6,669.3 crore was 32 per cent of the net revenues for the recently ended quarter, as against Rs 4,921 crore in the corresponding quarter ended December 2018.

EXPLAINED

Banking still under pressure, PSU lenders worst hit

The banking sector is yet to regain strength as credit growth has slowed to 7.2 per cent in November 2019 from 13.8 per cent in the year-ago period. Driven by the fall in credit growth and slow resolution of NPAs, profits of public sector banks have come under pressure. Further, PSU banks’ return on equity and return on assets numbers also remain weak when compared to their private sector counterparts. Even after many PSU banks have either been merged or are set for merger in the coming months to make their operation smoother and economic, the NPA pressure still mounts on their balance sheet and is projected to increase further.

The main component of other income — fees and commissions — rose by 24.1 per cent to Rs 4,526.8 crore for the quarter under review.

Gross non-performing assets (NPAs) were at 1.42 per cent, or Rs 13,427 crore, of gross advances as on December 2019 (1.2 per cent excluding NPAs in the agricultural segment), compared with 1.38 per cent as on December 2018 (1.1 per cent excluding NPAs in the agricultural segment).

Total provisions — comprising specific, floating, contingent and general provisions — were 119 per cent of the gross non-performing loans.

Provisions and contingencies for the latest quarter were Rs 3,043.6 crore (consisting of specific loan loss provisions of Rs 2,883.6 crore and general provisions and other provisions of Rs 159.9 crore), as against Rs 2,211.5 crore for the quarter ended December 2018.

The specific loan loss provisions in the current quarter include one-offs of approximately Rs 700 crore, primarily relating to certain corporate accounts.

Total deposits were Rs 10,67,433 crore, an increase of 25.2 per cent over December 2018. Total advances were Rs 936,030 crore, an increase of 19.9 per cent over the year-ago period, HDFC Bank said.

According to the lender, domestic advances grew by 20.9 per cent over December 2018. As per regulatory segment classification, domestic retail loans rose by 14.1 per cent and domestic wholesale loans increased by 29.3 per cent.

The domestic loan mix as per Basel II classification between retail and wholesale was 52:48. Overseas advances constituted 2 per cent of total advances, the private lender said.

On Friday, shares of HDFC Bank declined by 0.76 per cent to Rs 1,277.85 on the BSE. The bank’s market captalisation was at Rs 6.99 lakh crore on Friday.

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