HDFC Bank’s fiscal fourth quarter net profit was at Rs 3,990 crore, broadly in line with the street expectations, while its income from interest beat estimates. India’s largest private sector bank’s Jan-Mar net profit was slightly higher that ET Now’s consensus estimate of Rs 3,950 crore, while the lender’s net interest income at Rs 9,055 crore topped the TV channel’s estimate of Rs 8,670 crore. The company’s net interest margin too, improved by 20 basis points to 4.3% in the fourth quarter from 4.1% in the third quarter.
Amid the ongoing discourse about the stress in the banking sector on account of bad debts and stressed assets, HDFC Bank fared well on this front with its Gross NPAs (non-performing assets) remaining flat on-quarter at 1.05% during Jan-Mar. Absolute gross NPAs were at Rs 5,885.7 crore in the latest reporting period, rising from Rs 5,232 core in the preceding quarter. Its Net NPA rose marginally to 0.33% in the quarter from 0.32% from the preceding three-month period.
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However, provisions rose substantially, as expected, specially following the Reserve Bank of India’s pro-active approach in nudging the banks towards identifying areas of concerns. HDFC Bank’s provisions in Jan-Mar rose 76% on-quarter to Rs 1,261.8 crore from Rs 716 crore. The company said that the provisioning consisted of a specific loan loss provision of Rs 978 crore, and general provisions of Rs 280 crore.
As at the end of the quarter on March 31, HDFC Bank’s CASA (current account and savings account) deposits were at a healthy 48% of the total deposits. Its deposits as on March 31 at Rs 6.4 lakh crore rose 12.3% on-year, while advances at Rs 5.55 lakh crore were up 19.4% on-year.
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The bank’s capital adequacy ratio at the end of the period fell to 14.6% from 15.5% a year ago, with the tier-I capital adequacy ratio falling 40 basis points to 12.8% from 13.2%.
The company cheered on the cost front, with its cost-to-income ratio falling to 42.4% in the quarter from 44.9% in the corresponding quarter a year ago. HDFC Bank board approved a dividend of Rs 11 per share.
HDFC Bank’s shares were trading firm, up 1.35% at Rs 1,481.75 on BSE, maintaining the earlier gains.