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Home >Companies >Company Results >HDFC Bank Q1 results: Net profit jumps 16%, board approves dividend of 6.50

The country's largest private sector lender HDFC Bank on Saturday reported a 16.1% year-on-year (YoY) rise in net profit at 7,729.64 crore in the quarter ended 30 June, 2021. The bank had posted a net profit of 6,658.62 crore in the corresponding quarter a year ago.

HDFC Bank's total income in the same period rose 6.7 per cent as the private bank's total income for June 2021 stood at 36771.47 crore against 34,453.28 crore. The private bank AGM also recommended a dividend of 6.50 per equity share in the board meeting held today.

Announcing the recommendation of 6.50 per equity share dividend HDFC Bank said, “The Board of Directors at its meeting held on June 18, 2021 recommended a dividend of 6.50 per equity share of face value of 1 each out of the net profits for the year ended March 31, 2021, subject to approval of the shareholders of the Bank at its ensuing Annual General Meeting. Effect of the proposed dividend has been reckoned in determining capital funds in the computation of capital adequacy ratio as at June 30, 2021."

The Mumbai-based bank’s gross bad-loan ratio widened to 1.47% at the end of June, from 1.32% in the prior quarter.

However, the HDFC Bank has reported decline in net profit and total income compared to the previous quarter. HDFC Bank's total income in April to June 2021 stands at 36,771.47 crore against 38,017.50 crore total income in January to March 2021. The leading private bank also reported decline in net profit in comparison to the previous quarter. Its net profit for April to June 2021 stands at 7,729.64 crore which stood at 8,186.51 crore in January to March 2021.

"The impact of COVID-19, including changes in customer behaviour and pandemic fears, as well as restrictions on business and individual activities, has led to significant volatility in global and Indian financial markets and a significant decrease in global and local economic activities. The disruptions following the outbreak, have led to a decrease in loan originations, the sale of third party products, the use of credit and debit cards by customers and the efficiency in collection efforts. This may lead to a continued rise in the number of customer defaults and consequently an increase in provisions there against," the private lender stated.

The HDFC Bank went on to add that the extent to which the COVID-19 pandemic will continue to impact the Bank's results will depend on ongoing and future developments, which are highly uncertain, including, among other things, any new information concerning the severity of the COVID-19 pandemic, and any action to contain its spread or mitigate its impact whether government-mandated or elected by us.

HDFC Bank is the first major lender in India to report results as the nation emerges from a second coronavirus wave that shuttered businesses and led to millions losing jobs. While the country’s most valuable bank has been less impacted by the severity of the pandemic on its asset quality, it saw its retail loans shrink by 1% in the June quarter from three months prior even as its overall loan book growth stayed robust at 14.4% annually.

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