HDFC Bank Ltd, one of India’s leading private sector lenders, has reported a robust performance for the quarter ended March, with a nearly 20% year-on-year rise in net profit to Rs 12,047 crore. The bank’s total income also grew impressively by 31% on year to Rs 53,851 crore. The board of directors has approved a final dividend of Rs 19 per share, indicating the bank’s commitment to rewarding its shareholders.
Net interest income, which is a key indicator of the bank’s core operating performance, grew by 24% on year to Rs 23,352 crore for the quarter. The bank’s net interest margin, a measure of the profitability of its lending operations, remained healthy at 4.1% on total assets and 4.3% based on interest earning assets.
The bank’s other income, which includes fee-based and non-interest income, also contributed to the strong bottomline, rising by 27% on year to Rs 8,731 crore. The pre-provision operating profit (PPoP), a measure of the bank’s operating efficiency, rose by 14.4% year-on-year to Rs 18,621 crore.
Provisions and contingencies for the quarter were at Rs 2,685.4 crore, compared with Rs 3,312.4 crore in the corresponding quarter a year ago, reflecting the bank’s prudent approach to risk management. The total credit cost ratio, a measure of the quality of the bank’s loan portfolio, improved to 0.67% from 0.96% a year ago, indicating stable asset quality.
HDFC Bank’s capital adequacy ratio, a measure of its ability to absorb losses, improved significantly to 19.26% as of March 31, compared to 18.90% a year ago and 17.66% in the previous quarter, highlighting the bank’s strong capital position.
In terms of business growth, HDFC Bank’s total deposits grew by a healthy 21% and were at Rs 18.83 lakh crore as of March 31. The bank’s current account and savings account (CASA) deposits, a low-cost source of funds for the bank, grew by 11.3% to Rs 5.62 lakh crore and Rs 2.73 lakh crore, respectively. Total advances rose by 17% to Rs 16 lakh crore, with domestic retail loans growing by 21%, commercial and rural banking loans by 30%, and corporate and other wholesale loans by 12.6%. Overseas advances constituted 2.6% of the total advances.
HDFC Bank’s subsidiaries also contributed to its overall performance, albeit with some volatility in the markets. HDFC Securities, the bank’s subsidiary engaged in securities trading, reported total revenue of Rs 486 crore compared to Rs 510 crore a year ago, with profit after tax decreasing to Rs 194 crore from Rs 236 crore. However, HDB Financial Services, the bank’s non-deposit taking non-banking finance arm, reported a robust growth of nearly 6% in net revenue to Rs 2,262.5 crore, with profit after tax increasing by 28% to Rs 545.5 crore.
Overall, HDFC Bank’s strong financial performance in the quarter ended March underscores its robust business model, prudent risk management, and commitment to shareholder value. With healthy growth in key financial metrics and stable asset quality, the bank continues to maintain its position as a leading player in India’s banking sector.