The country’s largest private sector lender HDFC Bank reported a near 23 per cent jump in its standalone net profit for the fourth quarter of the fiscal 2021-22 on the back of robust income and lower provisions.
For the quarter ended March 31, 2022, the bank reported a 22.8 per cent increase in its net profit to ₹10,055.2 crore as against ₹8,186.51 crore in the same quarter of the previous fiscal.
The lender’s net profit for the full fiscal year 2021-22 rose 18.8 per cent to ₹36,961.3 crore against ₹31,116.53 crore in 2020-21.
For the January to March 2022 quarter, the bank’s net interest income grew 10.2 per cent to ₹18,872.7 crore compared to ₹17,120.2 crore a year ago.
Net interest margin
The core net interest margin was at 4 per cent on total assets, and 4.2 per cent based on interest-earning assets in the fourth quarter of the last fiscal.
This was lower than the core interest income of 4.2 per cent on total assets and 4.4 per cent on interest-earning assets in the January to March 2021 quarter and 4.1 per cent and 4.3 per cent in the third quarter of 2021-22.
Non-interest income or other income remained almost flat and grew 0.6 per cent to ₹7,637.1 crore for the quarter ended March 31, 2022 as against ₹7,593.9 crore in the corresponding quarter of the previous year.
“Other income, excluding trading income, grew by 10.6 per cent over the quarter ended March 31, 2021,” HDFC Bank said in a statement on Saturday.
The bank’s tax expense increased by 12.7 per cent on a year-on-year basis to ₹2,989.48 crore in the fourth quarter of the fiscal.
Provisions and contingencies for the quarter ended March 31, 2022 were 29.4 per cent lower at ₹3,312.4 crore as against the total provisions of ₹4,693.7 crore for the quarter ended March 31, 2021.
The provisions for the fourth quarter of 2021-22 included specific loan loss provisions of ₹1,778.2 crore, and general and other provisions of ₹1,534.2 crore. Total provisions for the quarter included contingent provisions of approximately ₹1,000 crore.
Asset quality
Gross non-performing assets were at ₹16,140.96 crore, amounting to 1.17 per cent of gross advances as on March 31, 2022, as against 1.26 per cent as on December 31, 2021, and 1.32 per cent as on March 31, 2021.
Net non-performing assets were at ₹4407.68 crore or 0.32 per cent of net advances as on March 31, 2022 against ₹4,554.82 crore or 0.4 per cent a year ago.
The bank has added 563 branches and 7,167 employees during the quarter and 734 branches and 21,486 employees during the year.
“This, and other investments made during the year, will position the bank to capitalise on the growth opportunity,” it said.
Its total deposits increased 16.8 per cent year on year to ₹1,559,217 crore as on March 31, 2022 while advances increased by 20.8 per cent to ₹1,368,821 crore in the same period.
Retail loans grew by 15.2 per cent, commercial and rural banking loans grew by 30.4 per cent and corporate and other wholesale loans grew by 17.4 per cent.
Home loans grew by 18.3 per cent on a year on year basis to ₹83,056 crore as on March 31, 2022. The merger of HDFC Ltd with HDFC Bank is expected to give a big boost to mortgages for the lender.
The bank said it continued to add new liability relationships at a robust pace of 24 lakh during the quarter.
Liquidity coverage ratio was healthy at 112 per cent, well above the regulatory requirement.
Meanwhile, in a separate stock exchange filing on Saturday, the bank said its board will meet on April 23 to consider a proposal for recommendation of dividend on the equity shares for the fiscal 2021-22.
The board also approved the issuance of Perpetual Debt Instruments (part of Additional Tier I capital), Tier II Capital Bonds and Long Term Bonds (financing of Infrastructure and Affordable Housing) up to a total amount of ₹50,000 crore over the next 12 months through private placement mode.
Further, the bank’s board approved the re-appointment of Renu Karnad as Non-Executive Director for a period of five years with effect from September 3, 2022, subject to the approval of the shareholders at the ensuing Annual General Meeting. Karnad is a nominee of HDFC Ltd, which is the promoter of the bank.