HDFC Bank, the largest private-sector lender in the country, on Monday reported a rise in net profit of 30 per cent year-on-year to Rs 11,952 crore for April-June on the back of steady loan growth and treasury gains.
HDFC Bank’s consolidated net profit for the quarter ended June 30, 2023 was Rs 12,370 crore, up 29.1 per cent, over the quarter ended June 30, 2022.
The results are the performance of HDFC Bank (banking entity) and not the organisation that was born through the merger of HDFC with the bank, effective July 1, 2023.
Net interest income (interest earned less interest expended) for the quarter grew 21.1 per cent while the core net interest margin was 4.1 per cent on all assets and 4.3 per cent based on interest-earning assets, the bank said in a statement.
Other income, or non-interest income, was Rs 9,230 crore as against Rs 6,388 crore reported during the same period last financial year.
This was boosted by trading gains of Rs 552 crore in Q1 as compared to a loss of Rs 1,077 crore in the same period last year.
Other income excluding net trading and mark-to-market income grew 16.2 per cent over the quarter ended June 30, 2022. Provisions and contingencies for the quarter ended June 30, 2023, were Rs 2,860 crore as against Rs 3,188 crore for the quarter a year ago.
The credit-cost ratio was 0.70 per cent as compared to 0.91 per cent for last year’s June quarter and 0.67 per cent in the previous one.
The rise in credit cost is on account of the agricultural sector, said Srinivasan Vaidyanathan, chief financial officer. “Gross non-performing assets (NPAs) seasonally impact us in the June and December quarters.”
Gross NPAs were 1.17 per cent of gross advances as on June 30, 2023, as against 1.12 per cent on March 31, 2023, and 1.28 per cent as on June 30, 2022. Net NPAs were 0.30 per cent of net advances as on June 30, 2023. Deposits grew 19.2 per cent to Rs 19.13 trillion while current and savings account (CASA) deposits grew by 10.7 per cent. CASA deposits were 42.5 per cent of all deposits as of June 30, 2023. In absolute terms, HDFC Bank’s deposits grew Rs 30,000 crore during the quarter as compared to Rs 1.5 trillion in January-March.
Vaidyanathan said the first quarter was always of “low-deposit accretion” and slow branch expansion.
HDFC Bank added 1482 branches in the past 12 months, but during April-June the addition was 39. He said the bank would continue to add branches every year in the same way for the next few years. “Our building blocks are intact — branch, reach, distribution, customer relationship. That is important.”
The share of CASA deposits was 42 per cent, down from 44 per cent as on March 31, 2023, and 46 per cent at the end June 2022.
Vaidyanathan said the ratio was reverting to the long-term mean, which is 39 per cent.
Advances as of June 30, 2023, were Rs 16.15 trillion, an increase of 15.8 per cent over June 30, 2022.
Domestic retail loans grew 20 per cent, commercial and rural banking loans 29.1 per cent, and corporate and other wholesale loans 11.2 per cent.
Overseas advances constituted 2.6 per cent of advances.
With the merger of HDFC, the retail share in total loans is 57 per cent, as against 47 per cent pre-merger.
Vaidyanathan said the bank added 29,000 employees during the past 12 months and 8,500 last quarter. It has seen an attrition rate of 30 per cent and the rate is 40-50 per cent at entry level.