On April 16, HDFC Bank, a Leading Indian lender, reported a 23 percent year-on-year (YoY) increase in standalone net profit at Rs 10,055.2 crore for the quarter ended March 2022, as bad loans provisions decreased 29 percent, with further improvement in asset quality.
Net interest income (NII), which is the distinction between investment earnings and interest exerted, increased 10.2 percent year on year to Rs 18,872.7 crore in Q4, with credit increasing by nearly 21% and deposits increasing by 16.8 percent. "Core net interest margin was at 4% on total assets and 4.2 percent on interest-earning assets," the bank stated in an April 16 BSE filing.
HDFC Bank Q3 results highlights
HDFC Bank also reported that its recent advancements increased by 20.8 percent year on year to Rs 13.69 lakh crore in the fourth quarter of FY22, with growth in retail loan book of 15 percent, commercial and rural banking loans of 30.5 percent, and corporate and other wholesale loans of 17.5 percent over the same period last fiscal.
As of March 2022, the bank's deposits had increased by 16.8 percent year on year to Rs 15.59 lakh crore, with retail deposits increasing by 18.5 percent and wholesale deposits increasing by 10%.
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The share of Current Account Savings Accounts (CASA) deposit accounts reached Rs 7.51 lakh crore as of March 2022, a growth of around 22 percent year on year, while the ratio of CASA deposit accounts increased to 48 percent in the March 2022 quarter, compared to 46.1 percent the previous period last budgetary, according to the bank.
Regulations and contingent liabilities fell sharply to Rs 3,312.4 crore at the end of the March 2022 quarter, down 29.4 percent year on year, but up 10.6 percent sequentially. Total provisions for the March 2022 quarter included predicated provisions of approximately Rs 1,000 crore, according to the bank, which added that floating provisions were Rs 1,451 crore and conditional provisions were Rs 9,685 crore as of March 2022.
Asset quality improved further, with gross non-performing assets (as a percentage of gross breakthroughs) falling 9 basis points (bps) QoQ to 1.17 percent and net NPAs (as a ratio of net advances) falling 5 basis points successively to 0.32 percent at the end of the March quarter.
Non-interest income (or other income) increased by about half a percent to Rs 7,637 crore in Q4FY22 due to a loss on sale or revaluation of investments of Rs 40.3 crore during the quarter (compared to income of Rs 655.1 crore in the same period last year), according to the bank. The fees and committees segment, which accounted for 74% of other income, increased by 12% to Rs 5,630.3 crore during the same period. Pre-provision operating profit (PPOP) increased by 5.3 percent year on year to Rs 16,357 crore while operating costs increased by 10.6 percent year on year.
The bank stated that its total capital adequacy ratio (CAR) was 18.9 percent as of March 2022, up from 18.8 percent in the same period last year, with Tier-I CAR at 17.9 percent, up 30 basis points year on year. During the fiscal quarter ended March 20, 2022, the bank purchased loans totaling Rs 8,117 crore via direct assignment under the home loan arrangement with Housing Development Finance Corporation (HDFC). For the fiscal year 2021-22, the bank reported a profit of Rs 36,961.3 crore, an increase of 18.8 percent over the previous year, and a net interest income of Rs 72,009.6 crore, an increase of 11 percent over the previous year.
The merger of HDFC and HDFC Bank
The merger of HDFC and HDFC Bank was approved by the board of directors on April 4, this year. In terms of market capitalization, the combined entity would be the third-largest in India, subject to several approvals, including those from the Reserve Bank of India, the Competition Commission of India, the National Housing Bank, and the Insurance Regulatory Development Authority of India. HDFC shareholders will receive 42 HDFC Bank equity shares for every 25 shares held.
During the March quarter, the private sector lender added 563 branches, bringing the total number of branches to 6,342 as of the end of FY22.
The share price of HDFC Bank has fallen 1% in the current fiscal year (2022) and increased by 2.4 percent in the previous year, underperforming the BSE Sensex in both periods. The Sensex rose 0.14 percent, while the Nifty gained 19.5 percent.
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