HDFC Bank, a private sector lender, reported a 37.1% increase in net profit for the quarter ending March 31, 2024, reaching Rs 16,512 crore compared to Rs 12,047 crore in the same period last year.
Net interest income (the difference between interest earned and interest expended) grew by 24.5% to Rs 29,080 crore for the quarter. The core net interest margin stood at 3.44% on total assets and 3.63% on interest-earning assets. Operating expenses for the quarter included a provision of Rs 1,500 crore for staff ex-gratia.
In the quarter, HDFC Bank’s non-interest income surged, more than doubling to Rs 18,166 crore from Rs 8,731 crore in the corresponding period ending March 31, 2023. This growth was primarily driven by trading and mark-to-market gains of Rs 7,950 crore, compared to a loss of Rs 40 crore in the same period last year. Additionally, HDFC Bank completed the majority sale of its stake in HDFC Credila, an education finance subsidiary, for Rs 9,553 crore during Q4.
In a press release, the private sector lender stated, “The credit environment in the economy remains favorable, and the Bank’s credit performance across all segments continues to be robust.”
HDFC Bank’s Gross Non-Performing Assets (GNPA) stood at 1.24%, compared to 1.26% in the previous quarter and 1.12% in the fourth quarter of the previous financial year. During the quarter, the bank allocated floating provisions of Rs 1,090 crore.
The bank views this as an opportune moment to bolster its floating provisions, which are not designated to any specific portfolio but serve as a counter-cyclical buffer to fortify the balance sheet. These provisions also qualify as Tier-II Capital within regulatory limits.
Excluding the floating provisions, provisions and contingencies for the quarter ending March 31, 2024, were Rs 2,610 crore, down from Rs 2,690 crore for the same period in 2023.
HDFC Bank Spokesperson’s Remark
Srinivasan Vaidyanathan, the chief financial officer (CFO), highlighted that the bank’s performance across all segments is robust, prompting the decision to establish countercyclical buffers during a favourable period. He said, “Our book across all segments is performing healthy. It is an opportune stage, when everything is benign, you think about countercyclical buffers”.
Total deposits surged by 26.4% year-on-year, with current and savings account deposits increasing by 8.7%. Casa deposits accounted for 38.2% of total deposits. Deposits increased by Rs 1.66 trillion in the January-March period, with retail deposits contributing Rs 1.29 trillion.
Gross advances saw a notable 55.4% year-on-year increase. Retail loans surged by 108.9%, while commercial and rural banking loans grew by 24.6%. Corporate and other wholesale loans (excluding non-individual loans of HDFC Ltd) grew by 4.2%.
As of March 31, 2024, the Bank’s total Capital Adequacy Ratio (CAR) under Basel III guidelines stood at 18.8%, compared to 19.3% as of March 31, 2023, surpassing the regulatory requirement of 11.7%.
Also Read: Indian Economy Projected To Grow By 6.5% In 2024: UNCTAD
