HDFC Bank Q4: From interest income, provisions, hiring to asset quality, 10 key highlights of the quarter
For the full year, net profit stood at ₹44,108.7 crore, up 19.3% YoY. Overall, in FY23, the bank posted a total income of ₹192,800.4 crore as against ₹157,263.0 crore for the year ended March 31, 2022.
PremiumHDFC Bank, the largest private sector lender, recorded healthy growth in its fourth quarter results for FY23. The bank posted double-digit growth in both profitability and interest income. Its retail lending book witnessed robust growth with home loan products crossing ₹1 lakh crore mark. Also, the bank saw a dip in its provisions and gross NPA.
The bank's stock will be in focus on Monday after the Q4 earnings.
Here are the 10 key takeaways from the quarter:
1. Net profit:
In Q4FY23, the bank posted a profit before tax of ₹15,935.5 crore. But after providing t 3,888.1 crore for taxation, the Bank earned a net profit of ₹12,047.5 crore, an increase of 19.8% over the quarter that ended March 31, 2022.
For the full year, net profit stood at ₹44,108.7 crore, up 19.3% YoY.
2. Top-line front:
Net interest income (NII) which is the difference between interest earned less interest expended, in Q4FY23, climbed by 23.7% to ₹23,351.8 crore from ₹18,872.7 crore in Q4FY22. Core net interest margin was at 4.1 % on total assets, and 4.3% based on interest-earning assets.
Its revenue stood at ₹32,083.0 crore for the fourth quarter, rising by 21% YoY.
Overall, in FY23, the bank posted a total income of ₹192,800.4 crore as against ₹157,263.0 crore for the year ended March 31, 2022. Net revenues (net interest income plus other income) for the year ended March 31, 2023, were ₹118,057.1 crore, as against ₹101,519.5 crore for the year ended March 31, 2022.
3. Advances:
By end of the March 2022 quarter, the lender's total advances stood at ₹1,600,586 crore, an increase of 16.9% YoY. In terms of segment-wise, domestic retail loans grew by 20.8%, commercial and rural banking loans grew by 29.8%, and corporate and other wholesale loans grew by 12.6%. Overseas advances constituted 2.6% of total advances.
4. Retail loans:
HDFC Bank's total retail advances stood at ₹634,578 crore versus ₹531,767 crore in Q4FY22. Of the total, the bank's home loan products crossed ₹1 lakh crore mark, and came in at ₹102,067 crore in Q4FY23, while personal and auto loans stood at ₹171,676 crore and ₹117,429 crore respectively. Payment Products came in at ₹86,104 crore, loans against property were at ₹76,773 crore, two-wheeler loans posted ₹9,933 crore, and gold loans stood at ₹10,842 crore. Other retail loans recorded ₹59,754 crore in Q4FY23.
5. Deposits:
The bank witnessed healthy growth in terms of total deposits which came in at ₹1,883,395 crore by end of Q4FY23, an increase of 20.8% over March 31, 2022.
CASA deposits grew by 11.3% with savings account deposits at ₹562,493 crore and current account deposits at ₹273,496
crore. Time deposits were at ₹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.
6. Provisions:
The 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.
7. Asset quality:
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, which stood at 1% and 1.01% in Q3FY23 and Q4FY22.
Net non-performing assets were at 0.27% of net advances as of March 31, 2023.
8. Capital Adequacy:
The lender's total Capital Adequacy Ratio (CAR) as per Basel Ill guidelines was at 19.3% as against a regulatory requirement of 11.7%. This also includes a Capital Conservation Buffer of 2.5% and an additional requirement of 0.2% on account of the Bank being identified as a Domestic Systemically Important Bank (D-SIB).
Tier 1 CAR was at 17.1% as of March 31, 2023, compared to 17.9% as of March 31, 2022.
Risk-weighted Assets were at ₹1,586,635 crore in the latest quarter.
9. Dividend:
The bank's board recommended a dividend of ₹19.0 per equity share having a face value of Re 1 each, as against ₹15.5 per equity share paid in the previous fiscal.
10. Network:
As of March 31, 2022, HDFC Bank's distribution network was at 7,821 branches and 19,727 ATMs / Cash Deposit & Withdrawal Machines (CDMs) across 3,811 cities/towns as against 6,342 branches and 18, 130 ATMs / CDMs across 3, 188 cities/ towns as of March 31, 2022.
52% of its branches are in semi-urban and rural areas. Also, the bank has 15,921 business correspondents, which are primarily manned by Common Service Centres (CSC).
The bank made a net addition of 31,643 employees to 173,222 for the period ending March 31, 2023, compared to 141,579 as of March 31, 2022.
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