HDFC Bank on Saturday reported a 19.9 per cent jump in its net profit at Rs 12,698 crore for the third quarter ended December 2022, helped by a healthy rise in core income.
On a standalone basis, the largest private sector lender’s post tax profit grew 18.5 per cent to Rs 12,259.5 crore as compared to the year-ago period, as per an exchange filing.
The core net interest income grew 24.6 per cent to Rs 22,987.8 crore, on the back of a 19.5 per cent increase in advances. The bank’s net interest margin was stable at 4.1 per cent when compared to the preceding September quarter.
The bank’s other income during the reporting quarter came at Rs 8,499.84 crore, which was up from Rs 8,183.55 crore registered in the year-ago period. However, the upward momentum was restricted due to the sharp decline in trading income to Rs 261.4 crore as against Rs 1,046.5 crore in the year-ago period.
At a time when the banking system is grappling with a ‘war for deposits’ as seen in the sharp divergence between the credit and deposit growth numbers, the lender seems to be comfortably placed, as it recorded a 19.9 per cent growth in total deposits.
The share of the low-cost current and saving account deposits was 44 per cent in the overall deposit base, which was a decline from the 47.1 per cent in the year-ago period.
On the asset quality side, the gross non-performing assets ratio was stable at 1.23 per cent as of December 31, 2022. It set aside Rs 2,806.44 crore as provisions which was lower when compared with Rs 2,994 crore in the year-ago period and Rs 3,240.13 crore in the September quarter.
The total credit cost ratio was at 0.74 per cent as compared to 0.94 per cent for the year-ago period.
Operating expenses rose 26.5 per cent to Rs 12,463.6 crore during the quarter. The bank has added over 4,000 employees during the quarter and had 1,66,890 people working for it at the end of December.
The asset growth was led by commercial and rural banking loans which grew 30.2 per cent, while retail advances grew 21.4 per cent. Share of corporate and wholesale advances has now reduced to 25 per cent from 26 per cent as of September quarter. Corporate loans have declined due to slow demand and the de-leveraging exercises.
The bank, which is in the midst of getting regulatory approvals for merging its mortgage lending-focused parent HDFC with itself, reported a healthy addition of home loans in its portfolio during the quarter, which were driven by transfers from HDFC which are generally driven by loans sourced by it.
It seems to have added branches at a faster clip during the three months, and the overall network size stood at 7,133 at end-December as compared to 6,499 in September.
Among its subsidiaries, the brokerage HDFC Securities reported a decline in its December quarter net at Rs 203 crore as against Rs 258 crore a year ago, while HDB Financial Services net rose to Rs 501 crore from Rs 304 crore in the year-ago period.
The bank’s standalone capital adequacy ratio declined to 17.66 per cent as of December 31, 2022, which was down from 19.53 per cent in the year-ago period.
The HDFC Bank scrip closed 0.07 per cent, up at Rs 1,600.85 a piece on the BSE on Friday, as against gains of 0.51 per cent in the benchmark.