HDFC Bank on Tuesday reported a net profit of Rs 16,372 crore for the October-December quarter of 2023-24, which marks a 33.5 per cent jump from Rs 12,259 crore clocked a year ago.
In the October-December FY24 quarter, total deposits of the bank jumped by 27.7 per cent to Rs 28.47 lakh crore versus Rs 22.29 lakh crore in the corresponding quarter last year.
“Current rate of growth is quite robust. We came through the merger with certain dynamics and impact, we went through couple of quarters balancing that and in FY24-25, we hope to build more momentum in the deposits, to go for granular deposits and replace more borrowing which is at a higher cost. Important aspect of granular deposit built is the reach, that is expanding our reach,” said Srinivasan Vaidyanathan, Chief Financial Officer, HDFC Bank in the bank’s quarterly results presser on Tuesday.
He highlighted that the total deposit growth for this quarter is 27.7 per cent, where retail has been growing well while non retail book reduced by 3.3 per cent this quarter. Non-retail book is price sensitive, and the bank focussed on the retail book this time.
HDFC Bank witnessed a slight increase in gross non-performing assets (NPAs) to 1.26 per cent of the gross loans from 1.23 per cent a year ago. Meanwhile NPAs came down to 0.31 per cent from 0.33 per cent. The total credit cost ratio was at 0.49 per cent as compared to 0.74 per cent for the quarter ending December 31.
Vaidyanathan asserted that the credit quality remains sustainable and improving, while books are performing very well. He revealed that the write-offs in this quarter is about Rs 31 billion compared to last quarter’s Rs 32 billion.
He further added on the unsecured lending point of view where the banker revealed that the bank has had a growth of 10 per cent yoy in personal loans segment, which highlights that the bank has been modest in its growth of unsecured personal loans. Quality continues to be benign on the book and in originations as well.
Contingent Provision for AIFs
The Reserve Bank of India has tightened norms for lenders relating to making investments in units of Alternative Investment Funds (AIFs) to address concerns relating to possible evergreening of stressed loans.
The RBI said lenders cannot make investments in any scheme of AIFs, which has downstream investments either directly or indirectly in a company that has borrowed/ debtor company (currently has or previously had a loan or investment exposure anytime during the preceding 12 months) from them.
Commenting on this move and the bank’s status on the same, the HDFC Bank CFO revealed that the bank’s book was Rs 12.2 billion for AIFs, but after the current RBI circular asked to take provision, so on a prudent basis the bank has done the assessment and created a contingent provision.
What do the numbers say:
India’s largest private sector lender reported a growth of 33 per cent in net profit at Rs 16,372 crore, compared to Rs 12, 259 crore in the year-ago period. HDFC Bank’s net interest income came in at Rs 28,470 crore in the December quarter, reporting a growth of 24 per cent year-on-year.
HDFC Bank’s net interest income (NII) came in at Rs 28,470 crore in the December quarter, which increased by 24 per cent, compared to Rs 22,990 crore reported in the corresponding quarter of the previous fiscal.
The private lender’s total advances rose 62.4 per cent to Rs 24.69 lakh crore. Domestic retail loans of the bank grew by 111 per cent, commercial and rural loans of the bank rose 31.4 per cent and corporate and wholesale loans rose 11.2 per cent.
In the October-December quarter, the total deposits of the bank jumped by 27.7 per cent to Rs 28.47 lakh crore compared to Rs 22.29 lakh crore in the corresponding quarter last year. Current account and savings account deposits grew by 9.5 per cent with savings account deposits at Rs 5.79 lakh crore and current account deposits at Rs 2.58 lakh crore.
The bank’s gross non-performing assets (NPA) stood at 1.26 per cent, up from 1.23 per cent last year. On the other hand, net NPA for the quarter stood at 0.31 per cent compared to 0.33 per cent last year.
On Tuesday, shares of HDFC Bank settled 0.42 per cent higher at Rs 1,678.95 apiece on the BSE.
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