HDFC Bank Q4 result: Net revenue up 18.2 per cent from year ago quarter

As per the standalone financial resutls, the Bank’s net revenues (net interest income plus other income) increased by 18.2% to Rs 21,236.6 crore for the quarter ended March 31, 2020 over the corresponding quarter of the previous year.

Net interest income (interest earned less interest expended) for the quarter ended March 31, 2020 grew to Rs 15,204.1 crore from Rs 13,089.5 crore for the quarter ended March 31, 2019, driven by growth in advances of 21.3%, and a growth in deposits of 24.3%.

The net interest margin for the quarter was at 4.3%.

Other income (non-interest revenue) at Rs  6,032.6 crore was 28.4% of the net revenues for the quarter ended March 31, 2020 as against Rs 4,871.2 crore in the corresponding quarter ended March 31, 2019.

The four components of other income for the quarter ended March 31, 2020 were fees & commissions of Rs 4,200.8 crore (Rs 3,665.4 crore in the corresponding quarter of the previous year), foreign exchange & derivatives revenue of Rs 500.8 crore (Rs 403.3 crore for the corresponding quarter of the previous year), gain on sale / revaluation of investments of Rs 565.3 crore (gain of Rs 228.9 crore in the corresponding quarter of the previous year) and miscellaneous income, including recoveries and dividend, of Rs 765.7 crore (Rs 573.6 crore for the corresponding quarter of the previous year).

During the quarter, there was a considerable slowdown in economic activities following the outbreak of COVID-19.

The Bank, in its press release, said that with the government initiating lockdown in the latter half of March and the implementation of social distancing, there was a strong impact on business volumes - in terms of loan originations, distribution of third party products, and payments product activities, and the Bank could not optimize their collection efforts, and as a result of which fees/other income were lower by Rs 450 crore.

Operating expenses for the quarter ended March 31, 2020 were ₹ 8,277.8 crore, an increase of 16.3% over ₹ 7,117.1 crore during the corresponding quarter of the previous year.

The cost-to-income ratio for the quarter was at 39.0% as against 39.6% for the corresponding quarter ended March 31, 2019.

Pre-provision Operating Profit (PPOP) at Rs12,958.8 crore grew by 19.5% over the corresponding quarter of the previous year.

Provisions and contingencies for the quarter ended March 31, 2020 were Rs 3,784.5 crore (consisting of specific loan loss provisions of Rs 1,917.8 crore and general provisions and other provisions of Rs 1,866.7 crore) as against Rs 1,889.2 crore (consisting of specific loan loss provisions of Rs 1,430.3 crore and general provisions and other provisions of Rs 459.0 crore) for the quarter ended March 31, 2019.

Total provisions for the current quarter included credit reserves relating to COVID-19 in the form of contingent provisions of approximately Rs 1550 crore.

The Core Credit Cost ratio was 0.77%, as compared to 0.92% in the quarter ending December 31, 2019 and 0.69% in the quarter ending March 31, 2019.

Profit before tax (PBT) for the quarter ended March 31, 2020 was at Rs 9,174.3 crore.

After providing ₹ 2,246.6 crore for taxation, the Bank earned a net profit of Rs 6,927.7 crore, an increase of 17.7% over the quarter ended March 31, 2019.

For the year ended March 31, 2020, the Bank earned a total income of Rs 138,073.5 crore.

Net revenues (net interest income plus other income) for the year ended March 31, 2020 were Rs 79,447.1 crore, up by 20.6% over Rs 65,869.1 crore for the year ended March 31, 2019.

The net interest margin for the year ended March 31, 2020 was 4.3%.

The cost to income ratio for the year ended March 31, 2020 was at 38.6%, as against 39.7% for the year ended March 31, 2019.

The Bank’s net profit for the year ended March 31, 2020 was Rs 26,257.3 crore, up 24.6% over the year ended March 31, 2019.

According to the press release issued by the Bank, total deposits as of March 31, 2020 were Rs 1,147,502 crore, an increase of 24.3% over March 31, 2019.

CASA deposits grew by 23.9% with savings account deposits at Rs 310,377 crore and current account deposits at Rs 174,248 crore.

Time deposits were at Rs 662,877 crore, an increase of 24.6% over the previous year, resulting in CASA deposits comprising 42.2% of total deposits as of March 31, 2020.

The Bank in its release said that continued focus on deposits helped in the maintenance of a healthy liquidity coverage ratio at 132%, well above the regulatory requirement.

The releases also said that the Bank’s total Capital Adequacy Ratio (CAR) as per Basel III guidelines was at 18.5% as on March 31, 2020 (17.1% as on March 31, 2019) as against a regulatory requirement of 11.075% which includes Capital Conservation Buffer of 1.875%, and an additional requirement of 0.20% on account of the Bank being identified as a Domestic Systemically Important Bank (D-SIB).

As of March 31, 2020, the Bank’s distribution network was at 5,416 banking outlets and 14,901 ATMs / Cash Deposit & Withdrawal Machines (CDMs) across 2,803 cities /towns as against 5,103 banking outlets and 13,489 ATMs / CDMs across 2,748 cities / towns as of March 31, 2019.

Of the total banking outlets, 52% are in semi-urban and rural areas. In addition, we have 5,379 banking outlets managed by the Common Service Centres. Number of employees were at 116,971 as of March 31, 2020 (as against 98,061 as of March 31, 2019).

According to the release,gross non-performing assets were at 1.26% of gross advances as on March 31, 2020, (1.1% excluding NPAs in the agricultural segment) as against 1.42% as on December 31, 2019 (1.2% excluding NPAs in the agricultural segment) and 1.36% as on March 31, 2019 (1.2% excluding NPAs in the agricultural segment).

Net non-performing assets were at 0.36% of net advances as on March 31, 2020.

In accordance with the RBI guidelines relating to COVID-19 Regulatory Package dated March 27, 2020 and April 17, 2020, the Bank, in its release said, it would be granting a moratorium of three months on the payment of all installments and / or interest, as applicable, falling due between March 1, 2020 and May 31, 2020 to all eligible borrowers classified as Standard, even if overdue, as on February 29, 2020.

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