HDFC Bank said on Friday it will raise up to Rs 50,000 crore by issuing debt instruments, Tier II bonds and long term infrastructure bonds over the next 12 months, ostensibly to augment its capital base to support a growing business and a swelling loan book, as made evident by the company’s fiscal fourth quarter results.
HDFC Bank board has approved the issue of securities under private placement basis, the country’s largest private sector lender said in a notice to the stock exchanges, adding that the company will seek the shareholder approval for the same at the ensuing annual general meeting.
Earlier today, HDFC Bank reported that the 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%. However, the bank’s capital adequacy ratio is comfortably above the minimum required according to the Reserve Bank of India norms. Capital adequacy ratio refers to the proportion of capital maintained as a proportion of the lender’s risk-weighted assets.
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HDFC Bank further said that its advances at the end of the March quarter were at Rs 5.55 lakh crore, rising 19.4% from that a year ago. Its deposits as on March 31 at Rs 6.4 lakh crore rose 12.3% on-year. 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 provisions rose substantially, as expected, specially following the Reserve Bank of India’s proactive approach in nudging the banks towards identifying areas of concerns. HDFC Bank’s provisions in Jan-Mar rose 76% quarter on quarter to Rs 1,261.8 crore from Rs 716 crore.
On the other hand, HDFC Bank’s NPAs (non-performing assets) remained stable in the fiscal fourth quarter, even as the discourse about the stress in the banking sector on account of bad debts and stressed assets gains momentum. Gross NPAs remained flat on-quarter at 1.05% during Jan-Mar, and Net NPAs rose marginally to 0.33% in the quarter from 0.32% from the preceding three-month period.
Markets cheered the results, with HDFC Bank’s shares making a new all-time high of Rs 1,499 on NSE, rising 2.5% from the previous close.