HDFC Bank Q4 net profit up 22% to Rs 5,885 crore on interest income growth

HDFC Bank on Saturday reported a 22.6 per cent increase in net profit to Rs 5,885.1 crore for the March quarter of 2018-19. The private sector bank had registered a net profit of Rs 4,800 crore in the year-ago quarter. A healthy growth rate in net interest income helped the lender meet profit estimates.

Net interest income for the quarter increased 22.8 per cent to Rs 13,089.5 crore from Rs 10,657.7 crore in the same period of the previous financial year.

The bank said the increase was driven by an average asset growth rate of 19.8 per cent and a core net interest margin of 4.4 per cent for the quarter under review. The bank also said its board had approved raising up to Rs 50,000 crore by issuing debt over the next 12 months.

Gross non-performing assets as a percentage of gross advances stood at 1.36 per cent as of March 2019, compared to 1.38 per cent as of December 2018, and 1.30 per cent as of March 2018. 

The bank saw slippages of Rs 3,987 crore during the quarter, said Sashidhar Jagdishan, chief financial officer of HDFC Bank. The bank saw upgrades of Rs 1,000 crore, write-offs of Rs 700 crore and recoveries worth Rs 1,200 crore during the quarter. 

The bank had made contingent provisions in the December quarter on account of an anticipated surge in agricultural delinquencies and added more provisions in the March quarter, said Jagdishan. 

"We need to wait for the elections to get over and see the kind of debt waivers announced. The monsoon forecasts have also not been favourable," he added.

Provisions and contingencies for the quarter stood at Rs 1,889.2 crore,  against Rs 1,541.1 crore for the year-ago quarter and Rs 2,211.53 crore in the previous quarter.  The bank's provision coverage ratio as of March 31, 2019, was 71 per cent. The bank's total capital adequacy ratio stood at 17.1 per cent as of March 31, 2019, as against 14.8  per cent as of March 31, 2018. 

The board of directors also recommended a dividend of  Rs 15 per equity share of Rs 2 for the year-ended March 31, 2019, as against Rs 13 per equity share of Rs 2 for the previous financial year.

These announcements are subject to the approval of the shareholders at the bank's annual general meeting and other regulators. 

Other income for the March quarter saw slower growth of 15.2 per cent to Rs 4,871.2  crore. The bank said the slower growth rate in other income was largely on account of a "base effect" and "a deliberate pause" by the bank on the high growth segments in retail. Jagdishan said moderation of the payments business and a sharp decline in mutual funds fee were some of the reasons for the dip in growth. Total deposits for the quarter grew 17 per cent to Rs 9.23 trillion, while total advances grew 24.5 per cent to Rs 8.19 trillion over the year-ago period.

The bank's term deposits grew at 19.4 per cent to Rs 5.32 trillion, while current account and savings account deposits grew at 14 per cent, with savings account deposits at Rs 2.48 trillion and current account deposits at Rs 1.42 trillion.

The bank delisted its Global Depository Receipts (GDRs) program from the Luxembourg Stock Exchange due to the minimal number of GDRs outstanding and low trading volume.