HDFC Bank Q1 net profit up by 21% at INR 5,568 crore

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Net interest income for the quarter grew by 22.9% to INR 13,294.3 crore.

The Board of Directors of HDFC Bank Limited approved the Bank’s (Indian GAAP) results for the quarter ended June 30, 2019, at their meeting held in Mumbai on Saturday, July 20, 2019. The accounts have been subjected to a ‘Limited Review’ by the statutory auditors of the Bank.

STANDALONE FINANCIAL RESULTS:

Profit & Loss Account: Quarter ended June 30, 2019

The Bank’s total income for the quarter ended June 30, 2019 at ` 32,361.8 crore grew by 22.7% from ` 26,367.0 crore for the quarter ended June 30, 2018.

Net revenues (net interest income plus other income) increased by 24.8% to ` 18,264.5 crore for the quarter ended June 30, 2019 from ` 14,631.6 crore in the corresponding quarter of the previous year.

Net interest income (interest earned less interest expended) for the quarter ended June 30, 2019 grew by 22.9% to ` 13,294.3 crore, from ` 10,813.6 crore for the quarter ended June 30, 2018, driven by asset growth and a core net interest margin for the quarter of 4.3%.

Other income (non-interest revenue) at ` 4,970.3 crore was 27.2% of the net revenues for the quarter ended June 30, 2019 and grew by 30.2% over ` 3,818.1 crore in the corresponding quarter ended June 30, 2018. The four components of other income for the quarter ended June 30, 2019 were fees & commissions of ` 3,551.6 crore (` 3,171.0 crore in the corresponding quarter of the previous year), foreign exchange & derivatives revenue of ` 576.7 crore (` 499.6 crore for the corresponding quarter of the previous year), gain on revaluation / sale of investments of ` 212.0 crore (loss of ` 283.2 crore in the corresponding quarter of the previous year) and miscellaneous income, including recoveries and dividend, of ` 630.0 crore (` 430.7 crore for the corresponding quarter of the previous year).

Operating expenses for the quarter ended June 30, 2019 were ` 7,117.3 crore, an increase of 18.9% over ` 5,983.9 crore during the corresponding quarter of the previous year. The core cost-to-income ratio for the quarter was at 39.4% as against 40.1% for the corresponding quarter ended June 30, 2018.

Provisions and contingencies for the quarter ended June 30, 2019 were ` 2,613.7 crore as against ` 1,629.4 crore for the quarter ended June 30, 2018. The key components therein for the quarter ended June 30, 2019 were specific loan loss and contingent provisions of ` 2,413.5 crore (as against ` 1,432.2 crore for the corresponding quarter of the previous year) and general provisions ` 200.2 crore (as against ` 183.2 crore for the corresponding quarter of the previous year). General provisions include additional provisions of ` 85.9 crore for standard advances to the NBFC / HFC sector. Profit before tax (PBT) for the quarter ended June 30, 2019 was up 21.6% to ` 8,533.6 crore. After providing ` 2,965.4 crore for taxation, the Bank earned a net profit of ` 5,568.2 crore, an increase of 21.0% over the quarter ended June 30, 2018.

Balance Sheet: As of June 30, 2019

Total balance sheet size as of June 30, 2019 was ` 1,265,253 crore as against `1,080,409 crore as of June 30, 2018.

Total deposits as of June 30, 2019 were ` 954,554 crore, an increase of 18.5% over June 30, 2018. CASA deposits grew by 12.8% with savings account deposits at ` 253,338 crore and current account deposits at ` 125,663 crore. Time deposits were at ` 575,553 crore, an increase of 22.5% over the previous year, resulting in CASA deposits comprising 39.7% of total deposits as of June 30, 2019. The Bank’s continued focus on deposits helped in the maintenance of a healthy liquidity coverage ratio at 126%, well above the regulatory requirement.

Total advances as of June 30, 2019 were ` 829,730 crore, an increase of 17.1% over June 30, 2018. Advances to the vehicle loan segment, where sales volumes have seen some moderation, grew at 8.3% over the previous year. Domestic advances grew by 17.9% over June 30, 2018. As per regulatory [Basel 2] segment classification, domestic retail loans grew by 16.5% and domestic wholesale loans grew by 19.6%. The domestic loan mix as per Basel 2 classification between retail: wholesale was 54:46. Overseas advances constituted 3% of total advances.

Capital Adequacy: The Bank’s total Capital Adequacy Ratio (CAR) as per Basel III guidelines was at 16.9% as on June 30, 2019 (14.6% as on June 30, 2018) as against a regulatory requirement of 11.075% which includes Capital Conservation Buffer of 1.875%, and an additional requirement of 0.20% on account of the Bank being identified as a Domestic Systemically Important Bank (D-SIB). Tier 1 CAR was at 15.6% as of June 30, 2019 compared to 13.1% as of June 30, 2018. Common Equity Tier 1 Capital ratio was at 14.8% as of June 30, 2019. Risk-weighted Assets were at ` 965,635 crore (as against ` 844,894 crore as at June 30, 2018).

Dividend

The Board of Directors has declared a special interim dividend of ₹ 5 per equity share of ₹ 2 to commemorate 25 years of the Bank’s operations.