HDFC Bank Q4 net up 23% to 10,055 Cr. on credit growth, lower provisions


The country’s largest private lender, HDFC Bank, on Saturday reported a 23% rise in standalone net income to ₹10,055.20 crore for the March quarter, led by an increase in loan demand across all categories and lower loan loss provisions as non-performing loans were trimmed became.

The Bank’s net profit for the corresponding period of the previous financial year was ₹8,186.51 crore.

“After setting aside £2,989.5m for taxation, the bank achieved a net profit of £10,055.20m, a 22.8% increase on the quarter ended 31 March 2021,” HDFC Bank said in a Application for Admission.

The bank’s total revenue on a stand-alone basis grew by more than 8% to £41,085.78 billion in January-March 2021-22, compared to £38,017.50 billion in the same quarter of 2020-21.

“Prepayments increased by 20.8%, with the growth being across products and segments. We continued to add new liability relationships at a robust pace of 2.4 million (24 lakh) during the quarter,” the lender said in a release.

The Mumbai-based bank recorded a 20.8% increase in its total advances from the same period last year to ₹13,68,821 crore as of March 31, 2022.

Retail lending rose 15.2%, commercial and rural bank lending rose 30.4%, and corporate and other wholesale lending rose 17.4%, it said. Foreign advances accounted for 3.1% of the total advances.

Net income (net interest income plus other income) increased 7.3% from ₹24,714.10 billion to ₹26,509.80 billion for the quarter.

Net interest income (interest received minus interest paid) increased by 10.2% year-on-year to ₹18,872.70 million.

The bank said its noninterest income accounted for almost 29% of its net revenue at £7,637.10 billion.

HDFC Bank added 563 branches and 7,167 employees during the quarter and 734 branches and 21,486 employees during the year.

“These and other investments made throughout the year will position the bank to capitalize on growth opportunities,” she added.

In terms of asset quality, the bank stated that gross non-performing assets (NPAs) stood at 1.17% of gross advances as of March 31, 2022, compared to 1.26% previously.

Net NPAs (or bad loans) accounted for 0.32% of net advances, versus 0.40%.

Provisions and contingent liabilities for the quarter ended March 2022 were ₹3,312.40 billion (comprising of individual provisions for credit losses of 1,778.20 crore and general and other provisions of 1,534.20 crore). Total provisions for the year-ago quarter were ₹4,693.70 crore.

For the full year ended March 31, 2022, total revenue (standalone) increased from ₹1,46,063.10 billion to ₹1,57,263 billion in the prior fiscal year. Net profit increased by 18.8% to £36,961.30 billion over 2021-22.

On a consolidated basis, net income for the last quarter of fiscal 22 was ₹10,443 billion, up 23.8%. For the full year, consolidated net income increased 19.5% to 38,053 crore.

Total deposits at the end of March 2022 were ₹15,59,217 crore, an increase of 16.8%.

HDFC Bank further said that its total capital ratio (CAR) at 18.9% is higher than the regulatory requirement of 11.7%.

In a separate IPO filing, the bank said its board would meet on April 23 to consider a proposed dividend recommendation for 2021-22.

In a surprise announcement last week, the bank announced that its parent company HDFC Ltd. will be merged with HDFC Bank in about 18 months and the combined balance sheet will reach 17.87 lakhcrore.

HDFC Ltd – the country’s largest mortgage lender – has total assets under management of 5.26 lakh crore with a market capitalization of 4.44 lakh crore, while HDFC Bank is the largest private lender by asset size with a market capitalization of 8.35 lakh crore .

As part of the proposed merger agreement, HDFC Ltd shareholders will receive 42 shares in HDFC Bank (par value £1 each) for 25 shares in HDFC Ltd. (Face value £2 each).

Also the subsidiary/shareholder of HDFC Ltd. will fall under the bank after the merger process.

HDFC Bank said the merger was the logical next step given that both organizations have improved in size, track record of growth and profitability over the past two decades.

“Regulatory convergence and market developments over time have improved the risk-reward equation,” it added.

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