NEW DELHI: HDFC Bank, India’s largest private lender, has recorded steady earnings during a quarter for which banks are expected to take a significant hit due to the renewed recognition of Covid-related stresses.
HDFC’s results show that across key components, loan and deposit growth numbers were healthy, asset quality showed improvement, and net interest income growth was ahead of the Street’s expectations.
However, while net profit rose 18.2 per cent year-on-year to Rs 8,186.51 crore for the four quarter (Q4 FY21), it remained below analysts’ estimates of a 23-25 per cent year-on-year rise in net profit.
The bank’s net Interest Income (NII)—the difference between interest earned through lending and interest paid to depositors—saw a 12.6 per cent rise to Rs 17,120 crore during the quarter, compared to Rs 15,204 crore in the corresponding period of last year, primarily due to lower expenses.
Total advances rose 14 per cent from a year ago to Rs 11.32 lakh crore. Domestic retail loans witnessed a 6.7 per cent year-on-year rise, while the wholesale lending portfolio grew 21.7 per cent.
Retail loan growth was driven by home loans, and a rise in credit card outstanding.
Despite the Reserve Bank of India (RBI) barring the bank from issuing new cards in the quarter ended March, the lender’s credit card outstanding for the year grew 12 per cent to Rs 57,575 crore. Wholesale loans now form 53 per cent of the lender’s total domestic book.
Total deposits for the quarter, meanwhile, came in at Rs 13,35,060 crore, up 16.3 per cent over the corresponding period of the previous financial year, with CASA (Current Account Saving Account) deposits growing 27 per cent over last year.
On the asset quality front, its gross non-performing assets (NPAs) rose to 1.32 per cent against 1.26 per cent last year.
But, this was a positive surprise when compared with the 1.38 per cent GNPA reported in the October-December quarter.
Net NPA ratio stood unchanged at 0.4 per cent of net advances as of March 31, 2021, the bank said in a statement.
Profits were hit owing to the 24 per cent increase in provisions and contingencies, a figure which stood at Rs 4,693.7 crore compared to last year and 37.5 per cent over the previous quarter.
Meanwhile, HDFC Bank said that its board of directors has decided not to offer a final dividend for FY21 in view of the persisting uncertainty.
“The slowdown led to a decrease in loan originations, sale of third party products, use of credit and debit cards by customers and collection efforts,” it said.
12.6% increase recorded in the bank’s net interest income.
14% increase recorded in the bank’s total advances.
6.7% increase recorded in disbursement of domestic loans.