HDFC Bank Q1 net up 21% at Rs 5,568 cr on higher non-interest revenue

Private lender HDFC Bank has reported a 21 per cent growth in its standalone net profit at Rs 5,568 crore in the June quarter of FY20 against Rs 4,601.4 crore in the same period last year. The growth in profit is primarily being attributed to the bank’s higher non-interest revenue even as provisions made by the lender increased 60 per cent.

The net interest income of the lender stood at Rs 13,294.3 crore in Q1FY20, up from Rs 10,813.6 crore in the year-ago quarter, registering a growth rate of 23 per cent. Net revenue rose 24.8 per cent to Rs 18,264.5 crore in the June quarter as against Rs 14,631.6 crore in the corresponding quarter last year.

While the net interest margin (NIM) of the bank was 4.3 per cent, its core cost-to-income ratio for the June FY20 quarter was 39.4 per cent against 40.1 per cent in the same quarter last year.

The bank’s provisions for the quarter stood at Rs 2,613.7 crore, 60 per cent up from Rs 1,629.4 crore in the same period last year. Of the total provisions, loan loss and contingent provision stood at Rs 2,413 crore and general provisions at Rs 200 crore (including Rs 85.9 crore additional provisions for standard advances to stressed non-banking and home finance companies).

The bank reported marginal growth in its bad assets as the gross non-performing assets (NPAs) stood at 1.40 per cent compared to 1.33 per cent in the same quarter last year. Net NPAs of the bank were at 0.43 per cent compared to 0.41 per cent in the previous year. In absolute terms, gross NPAs were marginally up at Rs 11,768 crore against Rs 11,224 crore in the March quarter of FY19.

The bank’s advances grew 17 per cent at Rs 8.29 trillion in the June quarter of FY20. Deposits too reported a growth of 18.5 per cent to touch Rs 9.5 trillion.

Current Account Savings Account (CASA) deposits grew 12.8 per cent with savings account deposits at Rs 2.53 trillion and current account deposits at Rs 1.25 trillion.

The bank's continued focus on deposits helped maintain a healthy liquidity coverage ratio at 126 per cent, well above the regulatory requirement, said the bank in a press statement. 

Capital Adequacy Ratio (CAR) of the private lender stood at 16.9 per cent as on June 30, 2019.

HDB Financial Services, the NBFC arm of the bank, reported a net profit of Rs 221.9 crore and saw a 22.7 per cent increase in its loan book to Rs 56,287 crore up from Rs 45,889 crore in the same quarter last year. While the company’s gross NPAs were at 2.3 per cent, its net NPAs were lower at 1.7 per cent.

The board of directors of the bank has also declared a special dividend of Rs  5 per share to commemorate 25 years of the bank’s operations.