HDFC Bank: Net up 18%, names for new CMD decided

By: |
April 19, 2020 5:53 AM

The bank saw the fallout of the lockdown in the second half of March, with loan origination and cross-selling of other products slowing down, the management said.

However, the bank's provisions shot up over 100% y-o-y to Rs 3,784 crore.However, the bank’s provisions shot up over 100% y-o-y to Rs 3,784 crore.

HDFC Bank on Saturday reported an 18% year-on-year (y-o-y) growth in net profit for the quarter ended March to Rs 6,928 crore on the back of a 15% y-o-y rise in total income to Rs 35,918 crore, with non-interest income growing 24% y-o-y. However, the bank’s provisions shot up over 100% y-o-y to Rs 3,784 crore.

The board of India’s largest private sector lender HDFC Bank on Saturday decided on the best-suited candidates to succeed its chief executive officer and managing director Aditya Puri, whose names would be submitted to the RBI. HDFC Bank board had appointed a search committee and also engaged external headhunters to help it find the candidate.

“The Board of Directors of the bank has today (Saturday) finalised the names of three candidates, in the order of preference, for the position of the managing director and chief executive officer (MD & CEO) of the bank,” the bank informed the bourses in a statutory filing. The intimation did not elaborate on who the three are. A media report in the run up to the board meet on Saturday had said that the names of Sashidhar Jagdishan, Kaizad Bharucha and Sunil Garg are the ones who have made the cut.

Jagdishan and Bharucha are the internal candidates and have been serving the bank for many years each, while Garg is working with American bank Citi at present. Meanwhile, the bank also informed that Jagdishan and Bhavesh Zaveri, who is in charge of operations, have resigned as additional directors, following instructions from the RBI to keep their appointments in abeyance till a new MD and CEO takes charge. Both of them submitted their resignations from the post of additional directors and the bank’s board has accepted the same, the lender said.

In a statement, HDFC Bank said it holds provisions as on March 31 against the potential impact of COVID-19 based on the information available currently, and these are in excess of regulatory norms. “The bank held floating provisions of Rs 1,451 crore and contingent provisions of Rs 2,996 crore as on March 31, 2020. Total provisions (comprising specific, floating, contingent and general provisions) were 142% of the gross non-performing loans as on March 31, 2020,” the bank said.

The bank saw the fallout of the lockdown in the second half of March, with loan origination and cross-selling of other products slowing down, the management said.

“We continue with our strategy to build deposits to maintain a strong liquidity situation,” chief financial officer Srinivasan Vaidyanathan told analysts. In the second half of March, card spends were lower by 35% as compared to an average of spends in January and February. Collections were impacted by the lockdown and recoveries were hit by about Rs 100 crore, Vaidyanathan said.

The bank’s net interest income (NII), or the difference between interest earned and interest expended, rose 16% y-o-y to Rs 15,204 crore.

Core net interest margin (NIM) in Q4 rose to 4.3% from 4.2% at the end of December.

Asset quality performance showed an improvement, with the gross NPA ratio falling 16 basis points (bps) sequentially to 1.26% and the net NPA ratio down by 12 bps to 0.36%.

Total advances grew 21% y-o-y to Rs 9.94 lakh crore at the end of March. Retail loans constituted 51% of the loan book, while 49% came from wholesale loans. Growth came from both the retail and wholesale segments, which grew 14.6% and 29%, respectively.

Total deposits as on September 30 were Rs 11.47 lakh crore, an increase of 24% over March 31, 2019. Current account savings account (CASA) deposits grew 24% y-o-y, with SA deposits at Rs 3.1 lakh crore and CA deposits at Rs 1.74 lakh crore. Time deposits stood at Rs 6.63 lakh crore, an increase of 24.6% over the previous year. The CASA ratio improved to 42.2% from 39.5% at the end of December.

HDFC Bank’s total capital adequacy ratio (CAR) as per Basel III guidelines was at 18.5% as on March 31, 2020, up from 17.1% on March 31, 2019 and as against a regulatory requirement of 11.075%. The CAR includes capital conservation buffer (CCB) of 1.875% and an additional requirement of 0.2% on account of the bank being identified as a domestic systemically important bank (D-SIB). Tier 1 CAR was at 17.2% as of March 31, 2020, compared to 15.8% as of March 31, 2019. Common equity tier 1 (CET 1) ratio was at 16.4% as of March 31, 2020. Risk-weighted assets were at Rs 9.95 lakh crore, up from Rs 9.32 lakh crore on March 31, 2019.

The bank’s NBFC subsidiary HDB Financial Services posted a net profit of Rs 7,280 crore in Q4, up 15.5% y-o-y. Consolidated advances grew 20.1% to Rs 10.44 lakh crore as on March 31, 2020 from Rs 8.69 lakh crore as on March 31, 2019.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1CSB Bank reports 180% y-o-y hike in second quarter on higher interest income
2CSB Bank Q2 profit jumps to Rs 69 crore; to hike proportion of gold loans
3Bank of Maharashtra Q2 profit up 13% on higher interest income, lower provisioning