HDFC Bank Q4 net rises 18% on robust credit growth

Riding on the back of robust growth in net revenues, HDFC Bank reported an 18 per cent increase in standalone net profit at ₹3,990 crore in the fourth quarter ended March 31, 2017, as against ₹3,374 crore in the year-ago quarter.

For the financial year ended March 31, net profit of India’s second-largest private sector bank was up 18 per cent at ₹14,550 crore against ₹12,296 crore in the previous financial year.

The board of directors has recommended a dividend of ₹11 per equity share of ₹2 each (that is, 550 per cent), subject to approval by shareholders at the ensuing annual general meeting of the bank.

Bottomline in the reporting quarter increased despite loan-loss provisions, general and other provisions jumping almost 90 per cent to ₹1,262 crore (₹662.5 crore in the year-ago quarter).

In the fourth quarter, net revenues (net interest income plus other income) grew 21 per cent to ₹12,501 crore (₹10,319 crore).

Net interest income (interest earned less interest expended) increased 21.5 per cent year-on-year (y-o-y) to ₹9,055 crore due to healthy growth in assets and expansion in core net interest margin.

Other income — comprising fees/commissions, foreign exchange and derivatives revenue, gain on revaluation/sale of investments, miscellaneous income — was up 20 per cent to ₹2,866 crore.

As at March-end 2017, total deposits rose 18 per cent y-o-y to ₹6,43,640 crore, and advances by 19 per cent to ₹5,54,568 crore.

While the banking sector saw y-o-y non-food credit (or advances) growth of 5.21 per cent, HDFC Bank reported higher growth due to robust demand for working capital loans, short-term loans and trade finance from the corporate segment and good loan appetite on the retail side, especially for auto, commercial vehicles, credit cards, personal loans and business banking, said Paresh Sukthankar, Deputy Managing Director.

In the reporting quarter, the bank reported loan offtake of ₹60,000 crore — ₹30,000 crore each in the retail and corporate segments.

Sukthankar said the domestic loan mix between retail and wholesale has changed from 51:49 last year to 53:47.

The proportion of low-cost current account, savings account (CASA) deposits in overall deposits improved to 48 per cent as at March-end 2017 from 43 per cent as at March-end 2016.

Due to copious inflows of CASA deposits following scrapping of the ₹500 and ₹1,000 bank notes as part of the 52-day demonetisation exercise, the bank reported muted growth in fixed deposits.

Net interest margin improved to 4.30 per cent in FY17 from 4.20 per cent in FY16.

Gross non-performing assets nudged up to 1.05 per cent of gross advances as on March 31, 2017, as against 0.94 per cent on March 31, 2016.

The bank reported a consolidated net profit of ₹15,253 crore in FY17, up 19 per cent y-o-y.

Shares of HDFC Bank closed at ₹1,496.75 apiece, up 2.38 per cent over the previous close on the BSE.