The private sector lender's net profit jumped 19.58% to Rs 6,658.62 crore on a 6.46% increase in total income to Rs 34,453.28 crore in Q1 June 2020 over Q1 June 2019.
Profit before tax (PBT) rose 4.73% to Rs 8,937.75 crore in Q1 FY21 as against Rs 8,533.58 crore in Q1 FY20. Tax expense dropped 23.14% to Rs 2,279.13 crore in Q1 FY21 compared with Rs 2,965.42 crore in Q1 FY20. The Q1 earnings were announced today, 18 July 2020.
Net interest income (NII) (interest earned less interest expended) for the quarter ended 30 June 2020 jumped 17.8% to Rs 15,665.4 crore as compared to Rs 13,294.3 crore for the quarter ended 30 June 2019, driven by growth in advances of 20.9% Y-o-Y (year-on-year) and a growth in deposits of 24.6% Y-o-Y. The net interest margin for the quarter stood at 4.3%.
The continued slowdown in economic activity due to COVID-19 outbreak has led to a decrease in retail loan origination, sale of third-party products, use of credit and debit cards by customers, efficiency in collection efforts and waivers of certain fees. As a result, fees/other income were lower by approximately Rs 2,000 crore, the bank said in its exchange filing on Saturday, 18 July 2020.
The bank's gross non-performing assets (NPAs) stood at Rs 13,773.46 crore as on 30 June 2020 as against Rs 12,649.97 crore as on 31 March 2020 and Rs 11,768.95 crore as on 30 June 2019. The ratio of gross NPAs to gross advances stood at 1.36% as on 30 June 2020 as against 1.26% as on 31 March 2020 and 1.40% as on 30 June 2019. The ratio of net NPAs to net advances stood at 0.33% as on 30 June 2020 as against 0.36% as on 31 March 2020 and 0.43% as on 30 June 2019.
The bank's provisions and contingencies jumped 48.89% to Rs 3,891.52 crore in Q1 June 2020 over Rs 2,613.66 crore in Q1 June 2019.
During the quarter, the bank has used its analytical models to determine slippages, resulting in a more expedited recognition of NPAs, as well as accelerated corresponding specific provisions. The bank also continues to hold provisions as on 30 June 2020 against the potential impact of COVID-19 based on the information available at this point in time and the same are in excess of the RBI prescribed norms.
The bank held floating provisions of Rs 1,451 crore and contingent provisions of Rs 4,002 crore as on 30 June 2020. Total provisions (comprising specific, floating, contingent and general provisions) were 149% of the gross non-performing loans as on 30 June 2020.
Operating expenses for the quarter ended 30 June 2020 were Rs 6,911.5 crore, a decrease of 2.9% over Rs 7,117.3 crore during the corresponding quarter of the previous year. The cost-to-income ratio for the quarter was at 35.0% as against 39.0% for the corresponding quarter ended June 30, 2019. Operating expenses were lower primarily due to lower loan origination and sales volumes.
Pre-provision operating profit (PPOP) stood at Rs 12,829.30 crore, recording a 15.1% Y-o-Y growth over the corresponding quarter previous year.
Total deposits as of 30 June 2020 was at Rs 1,189,387 crore, registering a 24.6% Y-o-Y surge over 30 June 2019. Current Account-Savings Account (CASA) deposits grew by 26% Y-o-Y with savings account deposits at Rs 3.27 lakh crore and current account deposits at Rs 1.50 lakh crore.
Total advances as of 30 June 2020 were Rs 10,03,299 crore, an increase of 20.9% Y-o-Y over 30 June 2019. Domestic advances soared 21% Y-o-Y over 30 June 2019. As per regulatory [Basel 2] segment classification, domestic retail loans grew by 7.2% Y-o-Y and domestic wholesale loans grew by 37.6% Y-o-Y. The domestic loan mix as per Basel 2 classification between retail:wholesale was 48:52. The overseas advances constituted 3% of total advances, as per HDFC Bank's regulatory filing.
HDFC Bank is one of India's leading private banks. As of 30 June 2020, the HDFC Bank's distribution network was at 5,326 branches and 14,996 ATMs/cash deposit & withdrawal machines (CDMs) across 2,825 cities/towns as against 4,990 branches and 13,727 ATMs/CDMs across 2,764 cities/towns as of 30 June 2019.
Shares of HDFC Bank advanced 3.46% to Rs 1,099.15 on Friday (17 July). The stock added 7.78% in the past one month, outperforming the Nifty Private Bank index's 4.72% rise in the same period.
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