HDFC Bank records 20% rise in Q4 PAT to ₹12,047.5 cr, NII jumps 24%

Leading private sector lender, HDFC Bank posted 19.8% growth year-on-year in net profit to ₹12,047.5 crore for the fourth quarter ending March 31, 2023 (Q4FY23). Net interest income (NII) jumped by 23.7% to f 23,351.8 crore in the quarter under review. The bank showed healthy growth in deposits and credit, while provisions dropped steeply in Q4. Also, the bank's asset quality continued to be stable.

During Q4FY23, the bank's profit before tax stood at ₹15,935.5 crore. However, after providing taxation of ₹3,888.1 crore, HDFC Bank earned a net profit of ₹12,047.5 crore, an increase of 19.8% over the quarter that ended March 31, 2022.

On the top-line front, the bank posted NII which is the difference between interest earned and interest expended, at ₹23,351.8 crore in Q4FY23 --- rising by 23.7% from ₹18,872.7 crore for the quarter that ended March 31, 2022. The core net interest margin was at 4.1 % on total assets, and 4.3% based on interest-earning assets.

Additionally, the bank's net revenue soared by 21% YoY to ₹32,083.0 crore for the quarter as against ₹26,509.8 crore for Q4 of FY22.

Further, in the quarter, HDFC Bank's provisions and contingencies dropped sharply to ₹2,685.4 crore as against t 3,312.4 crore in Q4 of FY22.

Pre-provision Operating Profit (PPOP) was at ₹18,620.9 crore in Q4FY23. PPOP, excluding net trading and mark-to-market income, grew by 14.4% over the quarter that ended March 31, 2022.

In terms of asset quality, HDFC Bank's gross NPA declined to 1.12% of gross advances in Q4FY23 as against 1.23% in Q3FY23 and 1.17% in Q4FY22. The Q4FY23 gross NPA is excluding 0.94% NPAs in the agricultural segment.

Net non-performing assets were at 0.27% of net advances as of March 31, 2023.

Meanwhile, the bank's credit cost ratio was at 0.67%, as compared to 0.96% in Q4FY22.

Total deposits stood at ₹1,883,395 crore in Q4FY23, up by 20.8% YoY. CASA deposits rose by 11.3% with savings account deposits at ₹562,493 crore and current account deposits at Ts 273,496 crore. Time deposits were at t 1,047,406 crore, an increase of 29.6% over the corresponding quarter of the previous year, resulting in CASA deposits comprising 44.4% of total deposits as of March 31, 2023.

On the other hand, the total advances of HDFC Bank soared by 16.9% YoY to ₹1,600,586 crore in Q4FY23. Year-on-Year, domestic retail loans surged by 20.8%, commercial and rural banking loans saw a growth of 29.8%, and corporate and other wholesale loans increased by 12.6%. Overseas advances constituted 2.6% of total advances.

That being said, the total balance sheet stood at ₹2,466,081 crore, registering a rise of 19.2% compared to ₹2,068,535 crore as of March 31, 2022.

The bank has announced a dividend of ₹19 per equity share for the financial year FY23. 

On the bank's result, Shreyansh Shah, Research Analyst at Stoxbox said, "The country’s largest private bank, HDFC Bank, reported a muted performance in the fourth quarter, with both NIIs and net profit below market expectations. However, the bank’s asset quality showed stability, indicating the strength of the bank which does prudent credit profiling. We believe that the bank is beginning to be aggressive on the retail loan engine to encash the opportunity for margin improvement."

Going forward, Shah added, "we expect an increase in the bank's cost-to-income ratio as it envisions to be in 1-2 km of clients rather than the current 5-6 km"