HDFC Bank Posted 20% Jump In Q4's Net Profit Led By Core Performance

HDFC Bank, largest private sector lender reported a 20.6% jump in its consolidated net profit to Rs 12,594.5 crore for Q4FY23 ended on March 31, 2023 led by a healthy core performance. For the entire fiscal, it reported a 20.9 per cent increase in the net profit at Rs 45,997.1 crore as per PTI.

HDFC Bank reported a 19.8% growth in the post-tax profit on a standalone basis at Rs 12,047.5 crore. Its core net interest income rose 23.7% to Rs 23,351.8 crore on the back of a 16.9% jump in advances and the net interest margin being maintained at 4.1%.

The other income rose to Rs 8,731.2 crore for the reporting quarter from Rs 7,637.1 crore, a year-ago period. All the components under this line showed an improvement, except trading and mark-to-market, where it reported losses of Rs 37.7 crore compared to a gain of Rs 47.6 crore in the year-ago period. Amid the 'war for deposits' in the system, the lender has ducked the system-wide trend by reporting a 20.8 per cent growth in its base.

Share of the low-cost current and savings account deposits stood at 44.4 %as of March 31, 2023.

Retail loan book grew by 19.3%, corporate and wholesale banking loans showed slower growth of 12.6%, while the nearly 30% rise in commercial and rural banking advances, helped it report the overall loan growth number. Retail and corporate advances are now evenly placed in the overall loan pie, having a 38%, while commercial and rural banking occupies the remaining 24%.

From an asset quality perspective, the bank -- which is highly regarded for its hold over such issues -- reported an improvement, with the gross non-performing assets (GNPA) ratio improving to 1.12% as of March 2023 against 1.17% a year ago and 1.23% at the end of the preceding December quarter.

The overall provisions were reduced to Rs 2,685.37 crore for the reporting quarter on a standalone basis against Rs 3,312.35 crore in the year-ago period and Rs 2,806.44 crore in the preceding quarter. Its overall capital adequacy came at 19.3% as of March 2023, up from 18.9% over a year-ago.

In terms of network, the bank's overall number of branches stood at 7,821 as of March 31, of which 52% were in areas it classifies as semi-urban and rural, while the rest are in metros and urban areas. It added over 6,000 employees during the quarter and over 31,000 to take its overall strength to 1,73,222 as of March 2023.

The cost to net revenue inched up to 42% against 40% in previous quarter and 38% last year. The overall rise in operating expenditure was at 32.6% compared to a 21% growth in the net revenue.

In the board meeting held yesterday, board of directors recommended a dividend of Rs 19 per share for FY23 against Rs 15.5 per share a year ago. Among its subsidiaries, the broking arm witnessed a dip in its March quarter net profit at Rs 193.8 crore from Rs 235.6 crore, while HDB Financial Services' net profit grew by 27.7% to Rs 545.5 crore.

HDFC Bank said it is in the process of seeking remaining approvals and permissions for the merger with HDFC after the sanction received from the National Company Law Tribunal on March 17. The bank stock closed with gains of 0.51% at Rs 1,693.30 per share on the BSE on intraday basis.