HDFC Bank Q4: Net profit climbs 23% and 10 other key takeaways

HDFC Bank reported a 23% year-on-year growth in standalone net profit for the fourth quarter, as provisions for possible bad loans declined and asset quality improved.

India’s largest private-sector bank said net profit for the quarter ended March 31 rose to Rs 10,055.2 crore from Rs 8,186.51 crore a year earlier.

Net interest income (NII), the difference between interest earned and interest expended, increased 10.2% to Rs 18,872.7 crore. Core net interest margin was 4% on total assets, and 4.2% on interest-earning assets, the bank said.

The results announcement comes after HDFC Bank and mortgage lender HDFC on April 4 approved a merger of the two companies. Effectively, HDFC Bank will absorb HDFC. As per the proposed share swap ratio, HDFC shareholders will receive 42 shares of HDFC Bank for every 25 shares they hold in the mortgage lender.

Other key highlights

1) Advances rose 20.8% to Rs 13.69 trillion, led by 30.5% jump in commercial and rural loans.

2) Retail loan book grew 15%, corporate and other wholesale loans grew 17.5%.

3) Total deposits increased 16.8% to Rs 15.59 trillion, with retail deposits growing 18.5% and wholesale deposits climbing 10%.

4) Growth in Current Account Savings Accounts (CASA) deposits was 22% to Rs 7.51 trillion as of March 2022. The ratio of CASA deposits rose to 48% from 46.1%.

5) Provisions and contingencies fell 29% from a year earlier to Rs 3,312.4 crore, but increased 10.6% sequentially.

6) Total provisions for January-March 2022 included contingent provisions of about Rs 1,000 crore.

7) Gross non-performing assets fell nine basis points sequentially to 1.17% and net NPAs fell five basis points sequentially to 0.32%.

8) Total capital adequacy ratio (CAR) was 18.9% as of March 2022, up a tad from 18.8% a year earlier.

9) For the full year 2021-22, the bank’s profit jumped almost 19% to Rs 36,961.3 crore

10) Net interest income for 2021-22 rose 11% to Rs 72,009.6 crore.

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