HDFC Bank on Saturday reported 18.2% year-over-year (year-over-year) growth in net profit for the quarter ended March at Rs 8,186.51 crore on the back of a 26-year increase % YoY other income at Rs 7,594 crore, with Net Interest Income (NII) growing to 12.6% YoY at Rs 17,120 crore.
The bank’s provisions increased 24% year-on-year to Rs 4,693.7 crore. In a statement, HDFC Bank said total provisions for the current quarter include around Rs 1,300 crore in contingent provisions. The bank’s gross non-performing asset (NPA) ratio in the fourth quarter increased 41 basis points (bps) sequentially to 1.32% and the net NPA ratio increased 31 bps to 0.4%, the Supreme Court having overturned a stay of recognition of bad debts after August 31, 2020. On a pro forma basis, the gross NPA ratio fell by 4 bps from 1.36% at the end of December 2020.
“The bank also continues to hold provisions as of March 31, 2021, against the potential impact of Covid-19 based on the information available at this stage and this exceeds the standards prescribed by the RBI,” said HDFC Bank.
It held floating provisions of Rs 1,451 crore and contingent provisions of Rs 5,861 crore as of March 31, 2021. Total provisions – including specific, floating, contingent and general provisions – were 153% of gross APNs as of March 31. 2021. The hard-core net interest margin (NIM) in the fourth quarter was unchanged on a sequential basis at 4.2%.
Total advances as of March 31, 2021 were Rs 11.33 lakh crore, up 14% from March 31, 2020. Domestic advances increased 14.1% year-on-year. Domestic retail loans increased 6.7% and domestic wholesale loans increased 21.7%. The composition of domestic loans according to the Basel 2 classification between retail: wholesale trade was 47:53. Advances abroad represented 3% of total advances.
Total deposits as of March 31, 2021 were Rs 13.35 lakh crore, up 16.3% from March 31, 2020. Current Account Savings Account (CASA) deposits increased by 27%, with SA deposits at Rs 4.03 lakh crore and CA deposits at Rs 2.12 lakh crore. Term deposits stood at Rs 7.19 lakh crore, an increase of 8.5% over the corresponding quarter of the previous year. The CASA ratio was 46.1%, down from 42.2% a year ago.
The lender’s total capital adequacy ratio (BCR) under Basel III guidelines was 18.8% as of March 31, 2021, compared to 18.5% as of March 31, 2020 and against a regulatory requirement of 11.075%. The Tier 1 ROE was 17.6% as of March 31, 2021, compared to 17.2% as of March 31, 2020. The Tier 1 capital ratio (CET-1) was 16.9% as of March 31, 2021. Risk Risk-weighted assets were at Rs 11.31 lakh crore, against Rs 9.95 lakh crore as of March 31, 2020.
The bank’s NBFC subsidiary HDB Financial Services reported net profit of Rs 502.8 crore in T4FY21, down 51.4% from Rs 1,037 crore in T4FY20. The company’s provisions and contingencies for the quarter were at Rs 613 crore, up 56% year-on-year. The total loan portfolio was Rs 58,947 crore as of March 31, 2021, up 5.4% from Rs 55,930 crore as of March 31, 2020. As of March 31, 2021, the gross NPA ratio based on the approach used for non-bank lenders was 3.9%, compared to 3.5% as at March 31, 2020 and against 5.9% according to the pro forma approach as at December 31, 2020.