HDFC Bank Q1 net jumps 21% YoY to Rs 5,568 Cr

Mumbai: Private sector lender HDFC Bank’s April-June quarter earnings matched analyst expectations with profit growing 21 percent year-on-year, though asset quality weakened slightly on sequential basis.

Profit in quarter ended June 2019 increased to Rs 5,568.2 crore, from Rs 4,601.44 crore in year-ago period, the lender said in its BSE filing on July 20. The growth was driven by healthy NII, non-interest income and operating profit.

Net interest income, the difference between interest earned and interest expended, grew sharply by 23 percent to Rs 13,294 crore in Q1 year-on-year (YoY) due to asset growth and a core net interest margin for the quarter of 4.3 percent.

Loan growth was also in line with analyst expectations, at 17.1 percent year-on-year to Rs 8,29,730 crore in June quarter.

“Advances to the vehicle loan segment, where sales volumes have seen some moderation, grew at 8.3 percent over the previous year. Domestic advances grew by 17.9 percent over June 2018,” the bank said.

The lender further said that its deposits, which were at Rs 9,54,554 crore, grew by 18.5 percent over the same period last year. “CASA deposits grew by 12.8 percent and time deposits registered a 22.5 percent growth over the previous year,” it added.

On the asset quality front, gross non-performing assets as well as net non-performing assets increased by 4bps each sequentially to 1.4 percent and 0.43 percent in quarter ended June 2019 respectively.

Provisions for bad loans increased significantly to Rs 2,613.7 crore in the June quarter, higher by 38.3 percent as compared to previous quarter, and up by 60.4 percent from the year-ago period.

The bank registered a healthy 29 percent year-on-year growth in operating profit at Rs 11,147.2 crore and 30.2 percent growth in other income (non-interest income) at Rs 4,970.3 crore in the first quarter of financial year 2019-20.

Components of other income including fees and commissions, which grew by 12 percent year-on-year and revenue from foreign exchange and derivatives, which increased by 15.4 percent YoY in Q1.

Miscellaneous income, including recoveries and dividend, showed a solid 46.3 percent YoY growth during the quarter.

The core cost-to-income ratio for the quarter improved to 39.4 percent, which was better than the 40.1 percent for the corresponding quarter ended June 2018.Moreover, the bank declared a special interim dividend of Rs 5 per share of Rs 2 to commemorate 25 years of the bank’s operations.