HDFC Bank reports growth in Q4 earnings

New Delhi: The country's largest private sector lender HDFC Bank on Saturday reported a 23 percent jump in standalone net profit to Rs 10,055.20 crore for the March quarter, led by growth in loan demand across categories and lower provisioning as bad loans were trimmed.

The bank's net profit during the corresponding period of the previous fiscal stood at Rs 8,186.51 crore.

"After providing Rs 2,989.5 crore for taxation, the bank earned a net profit of Rs 10,055.20 crore, an increase of 22.8 percent over the quarter ended March 31, 2021," HDFC Bank said in a regulatory filing.

Total income of the bank on a standalone basis rose by over 8 percent to Rs 41,085.78 crore in the January-March period of 2021-22, as against Rs 38,017.50 crore in the same quarter of 2020-21.

"Advances were up 20.8 percent, with the growth coming across products and segments. We continued to add new liability relationships at a robust pace of 2.4 million (24 lakh) during the quarter," the lender said in a release.

The Mumbai-based bank witnessed an increase of 20.8 percent in its total advances from a year ago at Rs 1,368,821 crore, as of March 31, 2022.

Retail loans grew by 15.2 percent, commercial and rural banking, loans by 30.4 percent, and corporate and other wholesale loans by 17.4 percent, it said. Overseas advances constituted 3.1 percent of the total advances.

Its net revenues (net interest income plus other income) increased by 7.3 percent to Rs 26,509.80 crore for the quarter, from Rs 24,714.10 crore earlier.

The net interest income (interest earned minus interest expended) grew by 10.2 percent from a year ago to Rs 18,872.70 crore.

The bank said its non-interest income was nearly 29 percent of its net revenues at Rs 7,637.10 crore.

HDFC Bank added 563 branches and 7,167 employees during the quarter and 734 branches and 21,486 employees during the year.

"This, and other investments made during the year, will position the bank to capitalize on the growth opportunity," it added.

On the asset quality front, the bank said the gross non-performing assets (NPAs) were at 1.17 percent of the gross advances as of March 31, 2022, compared to 1.26 percent earlier.

Net NPAs (or bad loans) stood at 0.32 percent of the net advances, as against 0.40 percent.

Provisions and contingencies for the quarter ended March 2022 were at Rs 3,312.40 crore (consisting of specific loan loss provisions of Rs 1,778.20 crore and general and other provisions of Rs 1,534.20 crore). Total provisions were at Rs 4,693.70 crore in the year-ago quarter.

For the full year ended March 31, 2022, total income (standalone) rose to Rs 157,263 crore from Rs 146,063.10 crore in the previous fiscal.

The net profit rose by 18.8 percent to Rs 36,961.30 crore in 2021-22.

On a consolidated basis, net profit in the last quarter of FY22 was Rs 10,443 crore, up by 23.8 percent. For the full year, the consolidated net profit climbed 19.5 percent to Rs 38,053 crore.

Total deposits at March-end 2022 stood at Rs 1,559,217 crore, up by 16.8 percent.

HDFC Bank further said its total capital adequacy ratio (CAR) at 18.9 percent was higher than the regulatory requirement of 11.7 percent.

In a separate stock exchange filing, the bank said its board of directors will meet on April 23 to consider a proposal for a recommendation of dividends for 2021-22.

In a surprise announcement last week, the bank said its parent company HDFC Ltd will be merged into HDFC Bank in about 18 months and the combined balance sheet will reach Rs 17.87 lakh crore.

HDFC Ltd -- the country's largest mortgage lender -- has total assets under management of Rs 5.26 lakh crore with a market capitalization of Rs 4.44 lakh crore, while HDFC Bank is the largest private sector lender by assets size with a market capitalization of Rs 8.35 lakh crore.

Under the proposed merger deal, shareholders of HDFC Ltd will receive 42 shares of HDFC Bank (face value Re 1 each) for 25 shares of HDFC Ltd (face value Rs 2 each).

Also, the subsidiary/associates of HDFC Ltd will come under the bank post the amalgamation process.

HDFC Bank had said the merger is the logical next step as the scale, growth track record, and profitability of both organizations has strengthened over the last two decades.

"Regulatory convergence and market developments over time have improved the risk-reward equation," it added.