Despite higher provisioning and ₹2,000 crore drop in fees income due to lockdown impact, private sector lender HDFC Bank earned 19.6% growth in net profit at ₹ 6,658.6 crore for the first quarter ended June 30, 2020 against ₹5,568.16 crore during the same quarter last year.
The bank’s net revenues (net interest income plus other income) grew to ₹ 19,740.7 crore from ₹ 18,264.5 for the same period last year.
Net interest income (interest earned less interest expended) grew by 17.8% to ₹15,665.4 crore from ₹13,294.3 crore year on year, driven by growth in advances of 20.9%, and a growth in deposits of 24.6%. The net interest margin for the quarter was at 4.3%.
“The continued slowdown in economic activity has led to a decrease in retail loan origination, sale of third party products, use of credit and debit cards by customers, efficiency in collection efforts and waivers of certain fees. As a result, fees/other income were lower by approximately ₹2,000 crore,” HDFC Bank said in a filing with stock exchanges.
The bank made provisions and contingencies of ₹3,891.5 crore as against ₹2,613.7 crore for the same period last year. Total provisions for the current quarter included contingent provisions of around ₹1,000 crore.
The total balance sheet size was ₹1,545,103 crore up 22.1%. Total deposits grew 24.6% to ₹1,189,387 crore.
“The Bank’s continued focus on deposits helped in the maintenance of a healthy liquidity coverage ratio at 140%, well above the regulatory requirement. Total advances as of June 30, 2020 were ₹1,003,299 crore, up 20.9%.” the bank said.
The bank’s total Capital Adequacy Ratio (CAR) as per Basel III guidelines was at 18.9% as against a regulatory requirement of 11.075%.
Gross non-performing assets were at 1.36% of gross advances and net non-performing assets were at 0.33% of net advances. The bank also continues to hold provisions against the potential impact of COVID-19 which are in excess of the RBI prescribed norms.
It held floating provisions of ₹1,451 crore and contingent provisions of ₹4,002 crore. Total provisions (comprising specific, floating, contingent and general provisions) were 149% of the gross non-performing loans.
The consolidated net profit for the quarter was ₹6,927 crore, up 22.0% and consolidated advances grew by 19.6% ₹1,053,683 crore.
Commenting on the result Rajiv Mehta, Lead Analyst at Yes Securities said, “Such resilient performance is highly comforting. However we would be closely monitoring moratorium data, management recent assessment of Covid impact and management transition.”
