HDFC Bank registers robust Q3 numbers; provisions & contingencies decline

The bank's provisions and contingencies (excluding tax provisions) fell 12.30% to Rs 2,993.98 crore in Q3 December 2021 over Rs 3,414.13 crore in Q3 December 2020.

The private sector bank's net profit rose 18.08% to Rs 10,342.20 crore on 8.33% increase in total income to Rs 40,651.60 crore in Q3 December 2021 over Q3 December 2020.

Net interest income (NII) (interest earned less interest expended) for the quarter ended 31 December 2021 grew by 13% to Rs 18,443.50 crore from Rs 16,317.60 crore for the quarter ended 31 December 2020. Core net interest margin was at 4.1%.

The bank's profit before tax (PBT) jumped 17.07% to Rs 13,781.97 crore in Q3 December 2021 over Rs 11,771.89 crore in Q3 December 2020.

The bank's gross non-performing assets (NPAs) stood at Rs 16,013.55 crore as on 31 December 2021 as against Rs 16,346.07 crore as on 30 September 2021 and Rs 8,825.56 crore as on 31 December 2020.

The ratio of gross NPAs to gross advances stood at 1.26% as on 31 December 2021 as against 1.35% as on 30 September 2021 and 0.81% as on 31 December 2020.

The ratio of net NPAs to net advances stood at 0.37% as on 31 December 2021 as against 0.40% as on 30 September 2021 and 0.09% as on 31 December 2020.

The bank held floating provisions of Rs 1,451 crore and contingent provisions of Rs 8,636 crore as on 31 December 2021. Total provisions (comprising specific, floating, contingent and general provisions) were 172% of the gross non-performing loans as on 31 December 2021.

Pre-provision Operating Profit (PPOP) stood at Rs 16,776 crore in Q3 FY22, rising 10.5% over the corresponding quarter of the previous year.

The growth in other income was driven by forex & derivatives revenue, and recoveries & dividend, while fees & commissions, which contribute 62% to non-interest income, witnessed a moderate growth Y-o-Y (year-on-year).

During the quarter, fees & commissions income stood at Rs 5,075.1 crore for the quarter, rising 2% Y-o-Y, foreign exchange & derivatives revenue was at Rs 949.5 crore, growing 68.8% Y-o-Y and miscellaneous income including recoveries & dividend stood at Rs 1,112.5 crore, rising by Rs 39.56 crore over the corresponding quarter of the previous year, as per the bank's BSE filing.

The total credit cost ratio was at 0.94% during the quarter, compared with 1.30% for the quarter ending 30 September 2021 and 1.25% for the quarter ending 31 December 2020.

Total advances as of 31 December 2021 were Rs 12,60,863 crore, an increase of 16.5% over 31 December 2020. Retail loans grew by 13.3%, commercial and rural banking loans grew by 29.4% and other wholesale loans grew by 7.5%. Overseas advances constituted 3.4% of total advances.

Total deposits as of 31 December 2021 were Rs 14,45,918 crore, an increase of 13.8% over 31 December 2020. CASA deposits grew by 24.6% with savings account deposits at Rs 4,71,029 crore and current account deposits at 2,10,195 crore.

Time deposits were at Rs 7,64,693 crore, an increase of 5.6% over the corresponding quarter of the previous year, resulting in CASA deposits comprising 47.1% of total deposits as of 31 December 2021.

As of 31 December 2021, HDFC Bank's distribution network was at 5,779 branches and 17,238 ATMs/ cash deposit & withdrawal machines (CDMs) across 2,956 cities/ towns as against 5,485 branches and 15,541 ATMs/ CDMs across 2,866 cities/towns.

Shares of HDFC Bank lost 0.92% to Rs 1,531.10 on BSE. The scrip hovered in the range of Rs 1,523 to Rs 1,556.45 during intraday trade.

On the technical front, the stock's RSI (relative strength index) stood at 52.801. The RSI oscillates between zero and 100. Traditionally, the RSI is considered overbought when above 70 and oversold when below 30.

The stock was trading above its 50-day moving average (DMA) placed at 1514.38 and 200-day moving average (DMA) at 1513.19.

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