HDFC Bank Reports 18% Jump In Q4 Profit; Asset Quality Improves

HDFC Bank reported a 17.72 percent year-on-year increase in net profit on Saturday at Rs 6,927.69 crore for the March 2020 ended quarter on higher other income, operating income, NII and lower tax cost.

Its net profit for the whole financial year 2019-20 rose by 24.6 percent from the previous year to Rs 26,257.3 crore.

HDFC Bank: Quotes, News

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Its NII (net interest income), that is the difference between interest earned and interest paid, grew by 16.15 percent to Rs 15,204.06 crore for the quarter under review from Rs 13,089.5 crore in the same period of the previous year. The increase in NII was driven by 21.3 percent rise in advances and 24.3 percent growth in deposits it said with a net interest margin of 4.3 percent.

Other non-interest income was at Rs 6,032.6 crore which is 28.4 percent of the net revenues for the March quarter compared to Rs 4,871.2 crore a year ago. HDFC Bank said that the four components of the other income were Rs 4,200.8 crore in fees & commission, Rs 500.8 crore in foreign exchange & derivatives revenue, Rs 565.3 crore in gain on sale/revaluation of investments and Rs 765.7 crore in miscellaneous income.

Its operating income for the Jan- March period rose by 16.3 percent YoY to Rs 8,277.8 crore compared to Rs 7,117.1 crore a year ago.

Asset Quality

HDFC Bank reported gross non-performing assets at 1.26 percent of gross advances as on 31 March 2020, which excluded 1.1 percent of those in the agriculture segment. The result is an improvement on 1.42 percent gross NPAs reported for the previous quarter and 1.36 percent in March 2019.

Net non-performing assets were 0.36 percent of the net advances.

As per RBI's latest announcements on relief measures for COVID-19, HDFC Bank said that on accounts where a moratorium will be granted the asset account classification will remain standstill. These include payments towards installments or interest due between 1 March and 31 May, even if overdue as on 29 February.

"The Bank holds provisions as on March 31, 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. As a result, GNPA and NNPA ratios were lower by 10 bps and 6 bps respectively," HDFC Bank said in its filing.

Dividend

The country's largest private bank also said that its board has decided not to issue a final dividend for the fiscal year ended 31 March 2020 on account of recent instructions from the RBI.

"The Reserve Bank of India, vide its circular dated April 17, 2020, has decided that banks shall not make any further dividend payouts from profits pertaining to the financial year ended March 31, 2020 until further instructions, with a view that banks must conserve capital in an environment of heightened uncertainty caused by COVID-19," it said in a stock exchange filing on Saturday.