HDFC Bank's September quarter net profit rises 16% to Rs 7,703 crore

 HDFC Bank on Saturday reported a 16 per cent rise in its consolidated net profit at Rs 7,703 crore for the second quarter ended September 30.

The private sector lender had posted a consolidated net profit of Rs 6,638 crore in the corresponding quarter a year ago.

Total consolidated income during the quarter under review rose to Rs 38,438.47 crore as against Rs 36,130.96 crore in July-September 2019, the bank said in a release.

On asset front, gross non-performing assets (NPAs) of the bank fell to 1.08 per cent of the gross advances as on September 30, 2020, as against 1.38 per cent a year earlier.

In absolute value, gross NPAs or bad loans reduced to Rs 11,304.60 crore from Rs 12,508.15 crore.

Likewise, net NPAs too came down to 0.17 per cent (Rs 1,756.08 crore) from 0.42 per cent (Rs 3,790.95 crore).

However, its provisioning for bad loans and contingencies rose to Rs 3,703.50 crore for the second quarter of FY21 as against Rs 2,700.68 crore parked aside for during the same period a year ago.

Consolidated advances grew by 14.9 per cent to Rs 10.89 trillion at the end of September 2020 from Rs 9.47 crore a year earlier, HDFC Bank said.

Meanwhile, the lender informed that its board of directors at the meeting held on Saturday approved appointment of Sashidhar Jagdishan as an additional director and also managing director and chief executive officer of the bank.

His appointment is subject to the approval of the shareholders of the bank. Jagdishan's appointment will be for a period of three years starting October 27, 2020, as approved by the Reserve Bank of India vide its email dated August 3, 2020, it said.

Bernstein downgrades HDFC Bank on unsecured credit, succession plans

HDFC Bank stocks fell after brokerage house Bernstein downgraded the bank on exposure to unsecured consumer loans amid a Coronavirus induced slowdown, and on “non-proactive handling of the management succession so far.”

The brokerage lowered the bank’s rating to ‘underperform’ from ‘market-perform’ earlier, and lowered the target price to Rs 750, from Rs 1,400 earlier.

“In the current pandemic driven environment. we believe HDFC Bank carries certain idiosyncratic risks and unique management challenges,” wrote Gautam Chhugani, analyst with Bernstein, adding, the bank’s portfolio is “most exposed to unsecured consumer credit risk versus peer private banks.”

The brokerage noted that 24 per cent of earnings and 36 per cent of HDFC Bank’s earnings growth were contributed by unsecured consumer finance and that unsecured retail credit is 17 per cent of HDFC Bank’s loan book. In comparison, peers ICICI and Axis Banks have 9 per cent of their book in unsecured retail credit. Kotak Mahindra Bank is defensive in its growth in retail unsecured credit and has been highlighting rising risks in unsecured consumer finance for the past two quarters. HDFC Bank’s subsidiary HDB Financial services also could pose challenges as it is focused on weaker informal segments.

The brokerage also said while HDFC Bank has weathered past crisis well and has been a favourite with foreign investors, success plan is a problem area.

“HDFC Bank's impending CEO succession and lack of proactive planning, sets up the bank to lose its sheen with investors who would have preferred less uncertainty. An unsatisfactory outcome of the succession process increases risk of a multiple derating,” the analyst wrote.

The bank’s shares were down 2.90 per cent at Rs 868.85 a piece on the BSE.

HDFC Bank slips over 1% as Q3 provisions rise; analysts maintain 'Buy'

Shares of private lender HDFC Bank declined 3.4 per cent from day's high to hit an intra-day low of Rs 1,258.75 on the BSE on Monday as investors turned cautious after it reported sharp spike in the provisions during the October-December quarter of the current fiscal (Q3FY20).

The bank's provisions, including those for bad loans and contingencies, grew a whopping 37.6 per cent to Rs 3,043.6 crore in Q3FY20, from Rs 2,211.5 crore reported in the year ago quarter. The increase in specific loan loss provisions jumped by 66.2 per cent to Rs 2,883.6 crore in the quarter from Rs 1,734.6 crore the previous year.

The asset quality, too, came under pressure during the quarter under review. Gross Non-performing assets (NPAs) ratio moved up at 1.42 per cent in December 2019, from 1.38 per cent in December 2018. The gross NPAs stood at 1.38 per cent in September 2019.

" Asset quality has deteriorated as the bank reported higher slippages from lumpy accounts and the agri segment. However, provisioning buffers should enable a steady earnings trajectory," said analysts at Motilal Oswal Financial Services in a results review note. They, now, peg the bank's loan book/PAT CAGR at 19 per cent/25 per cent over FY19-22, led by continued improvement in operating leverage, higher fee income and stable margins. The brokerage maintains a 'buy' on the stock with a target price of Rs 1,500.

ALSO READ: HDFC Bank's Q3 PBT up 15.6% to Rs 9,901 cr; provisions rise by 37.6%

The management, on its part, clarified that the asset quality of unsecured loans was holding well.

"However, the concern is over stress in the commercial vehicles and equipment segment. This is a function of the economic climate as freight rates and volumes have come down," it said during the post-result conference call.

"Though the bank’s orientation is more towards retail, we have been seeing robust traction in the wholesale segment for the last several quarters. Wholesale growth during the quarter has been a function of deepening penetration among existing clients as well as on-boarding new clients. The bank sees more room to grow further in the wholesale segment, but at the cost of credit quality or margins," said analysts at Nirmal Bang. They maintain 'Accumulate' rating (revised target price of Rs1,358 from Rs1,322) on the stock with revised NII estimates by 0.0%/0.7%/1.1%, PPOP estimates by 1.3%/0.6%/1.0% ,and PAT estimates by -3.6%/1.8%/0.8% for FY20/FY21/FY22, respectively. revised our target price to ).

Meanwhile, analysts at Edelweiss Securities, too, maintain 'buy' on the stock with a revised target price of Rs 1,520, up from earlier target of Rs 1,456.

"While headline GNPLs were steady at 1.42 per cent, Q3FY20 saw sharp rise in slippages at 2.4 per cent led by higher agri (expected) and corporate slippages (unexpected). That said, the bank created further specific provisions of INR7bn marked to corporate assets. This is in addition to Rs 14.5bn of floating provisions and Rs 14.6bn of contingency provisioning, in line with its policy of creating provisioning buffer when there are exceptional gains. Factoring this, we have baked credit cost of 130bps (earlier trend of 90bps) for FY20," they wrote in an earnings review note.

On the upside, the Mumbai-headquartered bank's net profit (profit after tax) rose 32.8 per cent year-on-year (YoY) to Rs 7,416.5 crore, compared to Rs 5,585.85 crore in the corresponding period of the previous year, while the profit before tax (PBT) rose by 15.6 per cent to Rs 9,901.85 crore. It had posted a PBT of Rs 8,566.89 crore in quarter ended December 2018 (Q3FY19).

Additionally, its net interest income (NII) in the quarter rose by 12.7 per cent to Rs 14,172.9 crore from Rs 12,576.8 crore a year ago. The net interest margin (NIM) for the quarter remained stable at 4.2 per cent, the bank said in a statement.

That apart, the bank's advances rose by 20 per cent to Rs 9.36 trillion. While domestic retail loans grew by 14.1 per cent, domestic wholesale loan book expanded at a much faster pace of 29.3 per cent. The domestic loan mix showed retail share of 52 per cent, while that of wholesale was 48 per cent.

The numbers were in line with Street expectations. “Led by the aggressive festive campaign, HDFC Bank is set to maintain its superior credit growth compared to the industry and increase market share. Credit and deposit growth is seen growing at 20 per cent and 25 per cent YoY to Rs 9.34 lakh crore and Rs 10.68 lakh crore, respectively,” analysts at ICICI Securities had written in an earnings preview note.

At 10:17 am, the stock was trading 1.28 per cent lower at Rs 1261.45 apiece, as against a 0.28 per cent decline in the benchmark S&P BSE Sensex. The stock hit an intra-day high of Rs 1,303.8 in the early morning deals.

HDFC Bank sees signs of rural revival as wider economy remains sluggish

HDFC Bank, India’s most valuable lender by market capitalisation, sees tentative signs of a revival in rural areas at a time when the wider economy is sputtering.

“The recent loan outreach programs underway in rural areas have given us the sense that the consumption in rural and semi-urban areas is turning more positive,” HDFC Bank Executive Director Kaizad Bharucha said in an interview last week. As of end-September, 52 per cent of the bank’s outlets were in rural and semi-urban India, a part of the economy that accounts for at least half of the national output.

Prime Minister Narendra Modi’s government has unveiled several steps to boost the economy, which is growing at its weakest pace in more than six years, including a surprise $20 billion corporate tax cut. The Reserve Bank of India is expected to cut interest rates again this week, after Friday’s report that gross domestic product growth slowed to 4.5 per cent in the September quarter.

For HDFC Bank, the weaker economy had led to a slowdown in loan growth, which eased to 15 per cent in the September quarter from 23 per cent a year earlier. But it remained healthy compared with the overall banking system which saw credit growth slowing to a two-year low just above 8 per cent.

“As a bank we are well positioned to offset a slowdown in either the consumption or investment side as we are present across the spectrum,” Bharucha said. “The demand for credit is not going away. It may just be subdued for a period of time,” he added.

He’s also cautiously optimistic about the outlook for corporate investment, based on the bank’s soundings with Indian executives.

Muted loan growth has hardly dented the upward march in HDFC Bank’s shares, which are about 19 per cent higher so far this year. Now valued at about $96 billion, the company trades around 26 times projected 12 month earnings. That’s almost three times more expensive than the Bloomberg World Banks Index and is the biggest valuation premium on record.

World’s most-loved megabank is surrounded by a lending crisis

Meanwhile, non-bank lenders from Dewan Housing Finance Corp Ltd. to Reliance Capital Ltd. have been reeling under a 17-month credit crisis after Infrastructure Leasing & Financial Services Ltd. defaulted on its debt last year. In a further blow to confidence, the Securities and Exchange Board of India placed curbs on operations of Karvy Stock Broking Ltd. after finding evidence it misused client funds.

But Bharucha doesn’t see a wider industry problem.

“There is enough control over stockbrokers and depositories and a default in the segment will not have a systemic impact,” he said. The central bank “has ensured that there is adequate liquidity in the system and availability of credit is not a problem.”

HDFC Bank's PBT surges 17% in Q2FY20; asset quality remains stable

Private sector lender HDFC Bank on Saturday reported a 17.47 per cent rise in its profit before tax (PBT) for the quarter ended September 30, riding on healthy loan book growth and other income. PBT for the period under review stood at Rs 8,997.40 crore, as against Rs 7,659 crore in the year-ago period. Net profit (after tax) rose about 27 per cent to Rs 6,345 crore, meeting analysts’ expectations.

The bank’s asset quality remained stable on a quarter-on-quarter (QoQ) basis with gross non-performing assets (GNPA) of 1.38 per cent of the total advances, as against 1.40 per cent in the June quarter. Provisions in the quarter rose 3.33 per cent on a QoQ basis to Rs 2,700.81 crore. These included specific loan-loss provisions of Rs 2,038 crore and general and other provisions of Rs 662.7 crore.

“The bank maintains 114 per cent of total provisions of the gross NPA and doesn’t see any trouble,” the bank management told analysts in a call. According to the management, the impact of recent tax rule changes on its profitability was about Rs 450 crore.

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Net interest income (NII), or the difference between interest income and interest cost, for the bank rose about 15 per cent to Rs 13,515 crore from Rs 11,763 crore in the corresponding quarter a year ago. Its net interest margin (NIM), or the difference between yields on advances and cost of deposits, was 4.2 per cent, slightly down from its first quarter’s NIM of 4.3 per cent.

The cost to income ratio for the quarter was 38.8 per cent, as against 39.9 per cent in the year-ago quarter. Other income (non-interest revenue) in the bank showed a healthy rise of 39.17 per cent to Rs 5,588.7 crore. In the ‘other income’, fees & commissions was Rs 4,054.5 crore for the second quarter, against Rs 3,295.6 crore in the corresponding quarter of the previous year.

Commenting on the slight decline in the cost to income ratio the management said the bank had focused on “taking more deposits which add to the cost and also impact the margins."

Deposits grew 23 per cent, and advances rose 19.5 per cent year on year.

The bank witnessed a healthy 22 per cent growth rate in its personal loan segment, which stood at Rs 1,020 crore. Total retail advances of the bank stood at Rs 4,606 crore, rising 14 per cent YoY. The bank management maintained that they saw robust growth in both the retail and corporate loan books in the second half of FY20.

“The bank is lending to the power, telecom and NBFCs sectors and is witnessing good demand from the rural and semi-urban areas,” the management said

HDFC Bank Q2 net up 27% to Rs 6,344 cr on loan growth, higher NIM

HDFC Bank, India's largest private lender, said on Saturday its net profit rose 27 per cent in the second quarter of its financial year, helped by loan growth and a higher net interest margin (NIM).

The bank said it made a net profit of Rs 6,344 crore, compared with Rs 5,005 crore in the same period of last year.

Gross non-performing assets (NPA), a measure of asset quality, was largely stable at 1.38 per cent of gross advances, while net NPA was at 0.42 per cent, HDFC Bank said.

However, provisions rose to Rs 2,700 crore from Rs 1,820 crore at the end of September 2018. NIM, a key indicator of a bank's profitability, was 4.2 per cent.

Total advances as of the end of September 2019 were at Rs 8.97 trillion rupees, up 19.5% over the corresponding quarter of last year. Meanwhile, deposits grew 22.6 per cent year-on-year.

The bank remains well capitalised, with a capital adequacy ratio of 17.5 per cent at the end the quarter, well above the regulatory requirement.

HDFC Bank Q2 net up 27% to Rs 6,345 crore; net interest income up 15%

HDFC Bank's September quarter standalone net profit has risen by 26.8 per cent year-on-year (YoY) to Rs 6,345 after providing Rs 2,652.40 crore for taxation.

Its profit in the year-ago quarter stood at Rs 5,005.73 crore profit.

The bank's net interest income (NII) rose 14.9 per cent to Rs 13,515.0 crore crore from Rs 11,763 crore in the corresponding quarter a year ago. Its net interest margin (NIM) for the quarter under review was 4.2 per cent.

HDFC Bank's other income was up 39.2 per cent at Rs 5,588.70 crore, from Rs 4,015.60 crore a year ago.

Provisions and contingencies for the quarter were up by as much as 48 per cent to about Rs 2,700 crore, including loan loss provisions of Rs 2,038 crore.

HDFC Bank Q2 preview: Profit seen 22% higher; growth in retail loans eyed

Change in deferred tax asset (DTA) amount due to the government’s decision to rationalise corporation tax rate may hamper HDFC Bank’s September quarter (July-Sept) numbers for the financial year 2019-20 (Q2FY20). The bank, analysts say, may still post a 22 per cent year-on-year (YoY) growth in net profit at around Rs 6,164 crore, when it reports its earnings on Saturday, October 19.

Analysts at Emkay Global Financial Services believe that despite the bank enjoying the overall benefit of the tax rate cut, its DTA could be hit by Rs 1,200 crore in this quarter. They say that the “benefits of the lower tax rate could get off-set by the mark-down on one-time DTA, leading to a net higher tax outflow”. They peg the net profit at Rs 6,102.6 crore, up 22 per cent YoY, from a profit of Rs 5,005.7 crore logged in Q2 of FY19. Sequentially, the PAT is likely to rise nearly 10 per cent from Rs 5,568.2 crore (Q1FY20).

“Revised lower tax rate, post-DTA impact will likely be used for higher contingency provisions given the stress emerging in the sector,” analysts at Prabhudas Lilladher noted in an earnings preview report.

They expect the provisions to jump 3.8 per cent on a yearly basis but decline nearly 28 per cent sequentially to be Rs 1,890 crore in the recently concluded quarter. Accordingly, the gross non-performing asset (GNPA) ratio is pegged at 1.37 per cent, up from 1.33 per cent in the corresponding quarter of the previous fiscal. The GNPA ratio, however, was 1.40 per cent in the first quarter of FY20.

During the quarter under review, the stock of India’s largest bank by market value has outperformed the benchmark indices. Between July and September, HDFC Bank dipped 1.2 per cent, as against a 2.6 per cent decline in the S&P BSE Sensex. The S&P BSE Bankex, too, tumbled 12.1 per cent during the period.

For the recently concluded quarter, the slippages are expected to show mixed trend as analysts eye stable numbers from the agri-sector but warn of stress in the retail space.

“Slippages should moderate as agricultural-slippages should be much lower QoQ… However, we will watch loan growth, current account-savings account (CASA) growth and NPLs from retail book,” said Prabhudas Lilladher.

For Q2FY20, loan growth of 17-19 per cent YoY, and 6-8 per cent QoQ between Rs 8.81 lakh crore and Rs 8.97 lakh crore is being eyed. On the deposits front, analysts at Nirmal Bang peg the deposits at Rs 10.2 lakh crore, a jump of 23 per cent YoY.

As for net interest income (NII), an estimated rise of 15-19 per cent is being eyed by analysts. Reliance Securities, for instance, pegs the NII at Rs 13,565 crore while Prabhudas Lilladher pegs the same at Rs 14,003 crore for the recently concluded quarter. Consequently, the net interest margin (NIM) is seen at 4.33 per cent.

Over the past year, the company’s market value has surged by $21 billion, more than any other bank worldwide, a Bloomberg report said. Analysts that Bloomberg spoke to said, HDFC Bank would grab market share from embattled shadow lenders and benefit from a flight to quality by investors who’ve grown wary of smaller competitors.

Current slowdown an opportunity to grow our books: HDFC Bank MD Puri

HDFC Bank on Monday asserted there is no stress on its credit portfolio because of the slowdown and it sees the current phase as an opportunity to grow its book.

Its managing director and chief executive Aditya Puri also informed that a search panel of the board announced earlier will be formed by January, to ensure the chosen successor to lead the bank can work with him for 1-2 months.

The bank had reported a 1.40 per cent gross non- performing assets ratio in June quarter. Growth slipping to six-year low primarily on a slip in consumption has raised concerns on the way forward for banking.

"We will grow, our assets will grow, our liabilities will grow, our swipes will grow, our number of customers will grow and we are very confident," Puri told reporters here, replying to questions around the economic slowdown.

He said that there have not been retrenchments in the industry which should make a lender wary and employment is growing overall, and added that auto majors may have retrenched some temporary workers.

Listing out positives which will work in the economy's favour like the good monsoon, expectations of more divestments and the sentiment turning positive with the tax cuts, he said the bank sees this as a "major opportunity" to grow.

"We see this as a major opportunity as a bank and we see no strain on our credit portfolio," he said, adding it has not compromised on its credit standards and is not lending to over-leveraged persons.

Puri said the bank is looking at semi-urban and rural areas as a major opportunity to grow from here on and underlined that one will be amazed to see the kind of inherent demand that exists.

When asked about his successors, amid a media report saying that the RBI is unlikely to relent on the 70 years retirement age for bank CXOs, Puri said a search panel of the board will be formed by January.

The panel will hire a search agency and a successor will be chosen in such a way that he or she gets to spend at least one or two months with him, Puri, who turns 70 in October next year, said.

The bank is not looking at any acquisition at present and may only look at it in the future if something gets available at the right price, Puri said.

The veteran banker said there is a need for better corporate governance at the co-operative banks, in comments that comes in the wake of issues at PMC Bank, among the largest such lenders.

HDFC Bank regularly has dealings with cooperative banks but did not have any dealing with PMC Bank, he said.

Seeking to assuage concerns, Puri said there is no scope to have system-wide concerns on banking at present.

HDFC bank says consumption growth to continue despite economic slowdown

Largest credit card issuer HDFC Bank feels the consumption story is still on and will keep growing the unsecured lending business going forward.

The largest private sector lender said the quality of its credit card portfolio is not yet affected by the broader economic realities and the stressed part is half that of the industry average.

The comments come amid times when a fall in consumption, one of the primary drivers of the unsecured credit card segment, is being blamed for the deepening slowdown across the economy.

Even when the broader economy is in great shape, you will have some parts under stress. Consumption story is still on, Parag Rao, the banks country head for payment products, told PTI here over the weekend.

However, he was quick to acknowledge that there is a slide in auto sales, but added this does not mean that the overall consumption story is down in the dumps.

High capex over the past six-seven years has resulted in a plateauing of growth, which is not akin to a fall, he added.

When asked about the delinquency rates, he said the bank has always been assessing risks in a defined way and putting in adequate systems in pace to ensure lowest delinquency rates.

The banks delinquency rates are half of the industrys average, he claimed without quantifying the same.

An industry source said average overdue for over 30 days for the cards industry stands at 4-4.5 percent.

Rao said only a fourth of its credit card user base is new to the bank, while others are existing relationships which ensures lower delinquency.

The bank, which launched a new proposition to the millennials over the weekend, is aiming to keep growing the unsecured book, Rao said.

When asked if it has the sufficient headroom to grow, he said it is comfortable from the board-approved portfolio levels perspective to grow this business.

The bank has a portfolio of 1.27 crore card outstanding as per the RBI data for June.

Its credit card outstanding had stood at RS 49,253 crore as of the June quarter, and had grown both year-on-year and sequentially.

HDFC Bank reports 18.04% jump in Q1 consolidated net at Rs 5,676.06 cr

Private lender HDFC Bank Saturday reported an 18.04 per cent increase in its consolidated net profit at Rs 5,676.06 crore for the April-June quarter on the back of healthy growth in core income and restricted bad loan proportions.

The bank's net profit during the similar April-June quarter of the previous fiscal stood at Rs 4,808.35 crore.

Consolidated income of the bank rose to Rs 34,324.45 crore April-June 2019 from Rs 28,000.06 crore in the year-ago quarter, the bank said in a regulatory filing.

The interest income grew to Rs 29,176.45 crore in the first quarter of 2019-20 from Rs 23,978.67 crore in the year-ago period, while income from other sources was up at Rs 5,148 crore as against Rs 4,021.39 crore last year.

On standalone basis, the net profit of the lender rose by 21 per cent to Rs 5,568.16 crore in April-June 2019 compared to Rs 4,601.44 crore in the year-ago quarter.

Standalone income increased by 22.7 per cent to Rs 32,361.8 crore during the reported quarter, from Rs 26,367.0 crore in the same quarter a year ago.

On the asset quality, the bank witnessed only a marginal uptick with the gross non-performing assets (NPAs) standing at 1.40 per cent of the gross advances as at end June 2019, from 1.33 per cent by end June 2018. Net NPAs were at Rs 0.43 per cent as against 0.41 per cent a year ago.

In value terms, bank's gross NPAs or bad loans were Rs 11,768.95 crore by June end this year, up from Rs 9,538.62 crore year ago same period.

Net NPAs were of the order of Rs 3,567.18 crore as against Rs 2,907.10 crore.

Provisions and contingencies for the quarter ended June 30, 2019 were Rs 2,613.7 crore as against Rs 1,629.4 crore for the quarter ended June 30, 2018.

The key components for this were specific loan loss, contingent provisions and general provisions, the bank said, adding general provisions included additional provisions of Rs 85.9 crore for standard advances to the NBFC/HFC sector.

The bank said its consolidated advances grew by 17.2 per cent to Rs 880,939 crore as on June 30, 2019 from Rs 751,386 crore as on June 30, 2018.

HDFC Bank said the advances to the vehicle loan segment, where sales volumes have seen some moderation, grew at 8.3 per cent over the previous year.

"The Board of Directors has declared a special interim dividend of Rs 5 per equity share of Rs 2 to commemorate 25 years of the Bank's operations," it said.

HDFC Bank Q1 net up 21% at Rs 5,568 cr on higher non-interest revenue

Private lender HDFC Bank has reported a 21 per cent growth in its standalone net profit at Rs 5,568 crore in the June quarter of FY20 against Rs 4,601.4 crore in the same period last year. The growth in profit is primarily being attributed to the bank’s higher non-interest revenue even as provisions made by the lender increased 60 per cent.

The net interest income of the lender stood at Rs 13,294.3 crore in Q1FY20, up from Rs 10,813.6 crore in the year-ago quarter, registering a growth rate of 23 per cent. Net revenue rose 24.8 per cent to Rs 18,264.5 crore in the June quarter as against Rs 14,631.6 crore in the corresponding quarter last year.

While the net interest margin (NIM) of the bank was 4.3 per cent, its core cost-to-income ratio for the June FY20 quarter was 39.4 per cent against 40.1 per cent in the same quarter last year.

The bank’s provisions for the quarter stood at Rs 2,613.7 crore, 60 per cent up from Rs 1,629.4 crore in the same period last year. Of the total provisions, loan loss and contingent provision stood at Rs 2,413 crore and general provisions at Rs 200 crore (including Rs 85.9 crore additional provisions for standard advances to stressed non-banking and home finance companies).

The bank reported marginal growth in its bad assets as the gross non-performing assets (NPAs) stood at 1.40 per cent compared to 1.33 per cent in the same quarter last year. Net NPAs of the bank were at 0.43 per cent compared to 0.41 per cent in the previous year. In absolute terms, gross NPAs were marginally up at Rs 11,768 crore against Rs 11,224 crore in the March quarter of FY19.

HDFC Bank Q1 net up 21% at Rs 5,568 cr on higher non-interest revenue

The bank’s advances grew 17 per cent at Rs 8.29 trillion in the June quarter of FY20. Deposits too reported a growth of 18.5 per cent to touch Rs 9.5 trillion.

Current Account Savings Account (CASA) deposits grew 12.8 per cent with savings account deposits at Rs 2.53 trillion and current account deposits at Rs 1.25 trillion.

The bank's continued focus on deposits helped maintain a healthy liquidity coverage ratio at 126 per cent, well above the regulatory requirement, said the bank in a press statement.

Capital Adequacy Ratio (CAR) of the private lender stood at 16.9 per cent as on June 30, 2019.

HDB Financial Services, the NBFC arm of the bank, reported a net profit of Rs 221.9 crore and saw a 22.7 per cent increase in its loan book to Rs 56,287 crore up from Rs 45,889 crore in the same quarter last year. While the company’s gross NPAs were at 2.3 per cent, its net NPAs were lower at 1.7 per cent.

The board of directors of the bank has also declared a special dividend of Rs 5 per share to commemorate 25 years of the bank’s operations.

HDFC Bank Q4 net profit up 22% to Rs 5,885 crore on interest income growth

HDFC Bank on Saturday reported a 22.6 per cent increase in net profit to Rs 5,885.1 crore for the March quarter of 2018-19. The private sector bank had registered a net profit of Rs 4,800 crore in the year-ago quarter. A healthy growth rate in net interest income helped the lender meet profit estimates.

Net interest income for the quarter increased 22.8 per cent to Rs 13,089.5 crore from Rs 10,657.7 crore in the same period of the previous financial year.

The bank said the increase was driven by an average asset growth rate of 19.8 per cent and a core net interest margin of 4.4 per cent for the quarter under review. The bank also said its board had approved raising up to Rs 50,000 crore by issuing debt over the next 12 months.

Gross non-performing assets as a percentage of gross advances stood at 1.36 per cent as of March 2019, compared to 1.38 per cent as of December 2018, and 1.30 per cent as of March 2018.

The bank saw slippages of Rs 3,987 crore during the quarter, said Sashidhar Jagdishan, chief financial officer of HDFC Bank. The bank saw upgrades of Rs 1,000 crore, write-offs of Rs 700 crore and recoveries worth Rs 1,200 crore during the quarter.

The bank had made contingent provisions in the December quarter on account of an anticipated surge in agricultural delinquencies and added more provisions in the March quarter, said Jagdishan.

"We need to wait for the elections to get over and see the kind of debt waivers announced. The monsoon forecasts have also not been favourable," he added.

Provisions and contingencies for the quarter stood at Rs 1,889.2 crore, against Rs 1,541.1 crore for the year-ago quarter and Rs 2,211.53 crore in the previous quarter. The bank's provision coverage ratio as of March 31, 2019, was 71 per cent. The bank's total capital adequacy ratio stood at 17.1 per cent as of March 31, 2019, as against 14.8 per cent as of March 31, 2018.

The board of directors also recommended a dividend of Rs 15 per equity share of Rs 2 for the year-ended March 31, 2019, as against Rs 13 per equity share of Rs 2 for the previous financial year.

These announcements are subject to the approval of the shareholders at the bank's annual general meeting and other regulators.

Other income for the March quarter saw slower growth of 15.2 per cent to Rs 4,871.2 crore. The bank said the slower growth rate in other income was largely on account of a "base effect" and "a deliberate pause" by the bank on the high growth segments in retail. Jagdishan said moderation of the payments business and a sharp decline in mutual funds fee were some of the reasons for the dip in growth. Total deposits for the quarter grew 17 per cent to Rs 9.23 trillion, while total advances grew 24.5 per cent to Rs 8.19 trillion over the year-ago period.

The bank's term deposits grew at 19.4 per cent to Rs 5.32 trillion, while current account and savings account deposits grew at 14 per cent, with savings account deposits at Rs 2.48 trillion and current account deposits at Rs 1.42 trillion.

The bank delisted its Global Depository Receipts (GDRs) program from the Luxembourg Stock Exchange due to the minimal number of GDRs outstanding and low trading volume.

HDFC Bank joins Reliance Industries, TCS in $100-billion m-cap club

Private sector lender HDFC Bank has joined the $100-billion market capitalisation (M-cap) club. Including the value of its American depository receipts (ADRs), the Mumbai-based lender’s market value currently is $101.6 billion.

Only Reliance Industries (M-cap $123 billion) and Tata Consultancy Services ($108 billion) have higher market value. At fourth and fifth place are consumer goods companies Hindustan Unilever and ITC, with market cap of $55 billion and $53 billion, respectively.

India now has three companies in the global top 100 list in terms of market value. Reliance Industries (RIL) ranks 72, Tata Consultancy Services (TCS) is at 86 and HDFC Bank at 99.

Both RIL and TCS first crossed $100 billion in market cap last year, but a correction in the markets and a fall in the rupee saw both slipping below the $100-billion mark in October. However, a sharp rebound in the markets and the rupee helped reclaim the mark.

The market cap of HDFC Bank’s local shares is $87 billion. But, the bank has an active ADR programme, where its shares trade at a 15 per cent premium to the value of its local shares. The bank had last year raised Rs 15,000 crore in equity, a large part of which came through the ADR issuance.