Q1 Performance: HDFC Bank net up 19% at Rs 9,196 crore

This was due to a decision to shift the asset mix to higher rated loans during the pandemic period, which adversely impacted the NIMs.

Q1 Performance: HDFC Bank net up 19% at Rs 9,196 crore
The lender posted a 14.5% on year rise in its net interest income to Rs 19,481 crore; advances during the quarter were up 22.5%. Fees and commissions segment, which contributes to over 80% of other income, improved 38% on year to Rs 5,360.4 crore.

Private sector lender HDFC Bank on Saturday reported a 19% year-on-year growth for the June quarter net profit at Rs 9,196 crore. The increase was driven by a 34% on year fall in provisions to Rs 3,187.7 crore.

The lender’s pre-provisioning operating profits (PPOP) were up 1.5% on year at Rs 15,367.8 crore; excluding trading and mark to market losses, the PPOP grew 14.7% on year.

The lender posted a 14.5% on year rise in its net interest income to Rs 19,481 crore; advances during the quarter were up 22.5%. Fees and commissions segment, which contributes to over 80% of other income, improved 38% on year to Rs 5,360.4 crore.

The bank’s core net interest margin (NIM) was flat sequentially at 4%, while the margin contracted by 10 basis points on year.
This was due to a decision to shift the asset mix to higher rated loans during the pandemic period, which adversely impacted the NIMs.

HDFC Bank’s asset quality remained good with gross non-performing assets (NPA) as on June 30 declining 19 bps on year to 1.28% and by 11 bps on a sequential basis. Net NPAs were at 0.35% of net advances and fell by 13 bps on year but increased slightly from 0.32 % sequentially. The total credit cost ratio was 0.91%, as compared to 1.67% in June 2021.

The lender posted a 19.2% on year growth in deposits to Rs 16 trillion in Q1FY23. The current account, savings account ratio (CASA) improved to 45.8% as on June 30 as compared to 45.5% a year ago.

The bank held floating provisions of Rs 1,451 crore and contingent provisions of Rs 9,630 crore as on June 30, 2022. Provision coverage ratio improved to 73% in the June quarter from 68% a year ago despite lower provision on account of improvement in asset quality. The total capital adequacy ratio was at 18.1% as on June 30 as against a regulatory requirement of 11.7% for domestic systemically important banks.

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