NEW DELHI: Beating Street estimates, private lender HDFC Bank Ltd on Monday reported a 50.6% increase in profit after tax (PAT) to Rs 15,976 crore for the quarter ending September (Q2FY24) as compared with Rs 10,605 crore in the same quarter in the previous year (Q2FY23).
This is for the first time that the lender is coming up with its quarterly earnings after its mega-merger with sister concern HDFC Ltd that came into effect on July 1. Owing to this, the September quarterly figures are not accurately comparable. The bank’s net revenue in Q2FY24 grew 33.1% year-on-year (YoY) to Rs 38,093 crore while the net interest income (interest earned less interest expended) for the quarter surged by 30.3% to Rs 27,385 crore.
The net interest margins (NIM) of the HDFC Bank were recorded at 3.4% on total assets in the September quarter. This was significantly lower than 4.1% NIM in the June ended quarter. Srinivasan Vaidyanathan, chief financial officer of HDFC Bank, said the dip in NIM was mainly due to the debt financing of liquidity by HDFC Ltd. before the merger. The CFO expects the debt funding to be repaid soon and so the improvement in NIM.
The lender’s asset quality also took a hit as its gross non-performing assets (NPA) ratio deteriorated to 1.34% in the September quarter from 1.23% in year-ago period. The bank’s net NPA ratio stood at 0.35% in the July-September quarter. In monetary terms, gross NPA came at Rs 31,577.89 crore in Q2FY24, as compared to `18,301 crore in a year ago period. In the June quarter, gross NPA stood at Rs 19,064.12 crore.
The cost-to-income ratio improved to 40.4 per cent as a merged entity riding on HDFC’s low numbers. The lender’s total deposits grew by 29.8% YoY to Rs 21.72 lakh crore in the September quarter. Current account savings account deposits surged 7.6%, with CASA ratio falling to 37.6%, from 42.5% as of June 30. The bank’s gross advances rose 57.7% to Rs 23.5 lakh crore in Q2. While domestic retail loans rose 112% YoY, the wholesale book rose 8% from last year. The commercial and rural loan book grew by 30% during the September quarter.
The bank hired 16,000 people on a net basis during the September quarter to take the overall staff strength to 1.98 lakh. Shares of the bank closed 0.47% down at Rs 1,529.50 apiece on the BSE as against a 0.17% correction in the benchmark.
