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Published: March 15, 2024
Updated: March 15, 2024

HDFC Bank

Provisions spurt by 45% in Q3FY24

Provisions by HDFC Bank have spurted by 45 per cent to Rs 4,216.64 crore during Q3FY2024. This was revealed by Srinivasan Vaidyanathan, CFO, at a conference call organized to discuss the performance of the bank during the third quarter ended December 2023. He said that the bank had reported 2% qoq growth in net profit at Rs 16,372.54 crore for the quarter. The net interest margins remained stable on a sequential basis at 3.4% in Q3FY2024, while it eased from the pre-merger level of 4.1% in Q3FY2023. The core fee income of the bank was steady sequentially, while it improved 15% yoy in Q3FY2024.

As regards asset quality, Mr Vaidyanathan pointed out that the bank has improved asset quality with a decline in fresh slippages of loans in Q3FY2024. The fresh slippages of loans declined to Rs 7,000 crore in Q3FY2024, compared with Rs 7,800 crore in the previous quarter and Rs 6,600 crore in the corresponding quarter last year. The recoveries and upgradations of NPAs stood at Rs 4,500 crore, while the write-off of loans was at Rs 3,100 crore in Q3FY2024.

PROVISIONS UP

The provision coverage ratio rose to 75.00% at end- December 2023 compared to 74.00% a quarter ago and 73.00% a year ago. The capital adequacy ratio of the bank stood at 18.4% with Tier I ratio at 16.8% at end-December 2023.

Discussing the business highlights, Mr Vaidyanathan said the business of the bank has increased 3% qoq to Rs 46,83,277 crore at end- December 2023, driven by a 5% qoq surge in advances to Rs 24,69,300 crore. Deposits rose 2% qoq to Rs 22,13,977 crore at end-December 2023. The CASA deposits of the bank rose 2% qoq to Rs 8,35,700 crore at end-December 2023. The current account deposits increased 3% qoq to Rs 2,55,800 crore, while saving account deposits increased 2% qoq to Rs 5,79,900 crore at end-December 2023. The CASA ratio rose to 37.7% at end- December 2023 compared to 37.6% a quarter ago. Term deposits increased 2% qoq to Rs 13,78,277 crore at end- December 2023.

Pointing out that loan growth during the quarter was healthy, the bank CFO added that advances growth was driven by retail loans rising 3% qoq to Rs 12,18,900 crore at end-December 2023, while credit to agriculture also increased 3% to Rs 93,000 crore and MSME 31% to Rs 6,80,100 crore at end-December 2023. The corporate credit rose 2% to Rs 4,36,300 crore at end-December 2023. The overseas credit jumped 51% qoq to Rs 41,978 crore at end- December 2023. The investment book declined 7% qoq to Rs 6,74,931 crore at end- December 2023.

Margins were stable, and the bank showed a 10 bps qoq jump in cost of funds to 4.9%, while the yield on advances increased 10 bps qoq to 8.3% in Q3FY2024. Thus, the NIM remained steady on a sequential basis at 3.4%. The bank added 146 branches and 92 ATMs in Q3FY2024. The book value of the bank stood at Rs 556.2 per share at end-December 2023, while the adjusted book value (net of NNPA and 10% of restructured advances) was Rs 545.5 per share at end-December 2023.

INTEREST UP

Pointing out that NII rises on a stable NIM, he added that the bank has recorded a 4% increase in the interest earned at Rs 70,582.61 crore, while interest expenses increased 4% to Rs 42,111.27 crore in Q3FY2024. NII improved 4% to Rs 28,471.34 crore in the quarter ended December 2023. The operating expenses of the bank rose 4% qoq to Rs 15,961.08 crore, as other expenses moved up 4% to Rs 10,609.32 crore, while employee expenses also rose 4% to Rs 5,351.76 crore in Q3FY2024. The cost to income ratio was nearly stable at 40.3% in Q3FY2024, compared with 40.4% in Q3FY2024, helping operating profit to increase 4% to Rs 23,647.30 crore. The bank showed a 45% qoq jump in provisions to Rs 4,216.64 crore. The loan loss provisions rose 7% to Rs 2,997 crore, while other provisions were at Rs 1,220.00 crore.

NET PROFIT UP

Net profit rose by 2% qoq to Rs 16,372.54 crore during the quarter ended December 2023. For the nine months, the net interest income increased to Rs 79,455.64 crore, while non-interest income was Rs 31,074.74 crore, pushing up the net total income to Rs 1,10,530.38 crore in 9MFY2024. Net profit increased to Rs 44,300.42 crore in 9MFY2024. The bank loan book stood at Rs 24.7 lakh crore at end-December 2023, reflecting the sequential momentum of Rs 1.1 lakh crore or 4.9%.

Retail advances grew 3.3% qoq, primarily driven by strong performance in the mortgage business. The CRB business continued its strong momentum, registering a qoq growth of 6.7%. Retail deposits grew over Rs 53,000 crore or 2.9% during the quarter, while non-retail deposits reduced by Rs 11,800 crore qoq, resulting in total deposit growth of Rs 41,100 crore or 1.9% during the quarter.