HDFC Bank’s Q4 PAT up 20% on strong growth in NII

HDFC Bank posted a net profit of ₹12,048 crore for Q4 FY23 — up 20 per cent YoY led by strong growth in net interest income (NII) and lower provisions, and despite a 33 per cent rise in operating expenses to ₹13,462 crore.

The board recommended a dividend of ₹19 per equity share for FY23, which is higher than ₹15.5 for FY22, and the highest ever since the stock listed on the bourses. The record date has been set as May 16.

NII for the quarter grew 24 per cent to ₹23,352 crore on the back of healthy loan growth. Core net interest margin (NIM) was at 4.1 per cent on total assets and 4.3 per cent on interest earning assets. The cost-to-income ratio was 42 per cent.

Other income was up 14.3 per cent at ₹8,731 crore accounting for 27 per cent of net revenue. The bank reported a net trading and mark to market loss of ₹38 crore for the quarter against a gain of ₹48 crore in the previous year.

Advances & Deposits

HDFC Bank’s advances grew 17 per cent on year to ₹16-lakh crore led by 21 per cent growth in domestic retail loans, 30 per cent in commercial and rural banking loans, and 13 per cent in other wholesale loans. Overseas advances constituted 2.6 per cent of total advances.

Provisions and contingencies for the quarter were ₹2,685 crore, 23 per cent lower YoY. Total credit cost ratio was at 0.67 per cent compared with 0.96 per cent a year ago.

Gross non-performing assets (NPA) ratio was at 1.12 per cent as on March 31, better than both 1.23 per cent a quarter ago and 1.17 per cent a year ago. Net NPA ratio was at 0.27 per cent.

Deposits of the bank grew 21 per cent YoY to ₹18.8-lakh crore as of March 31. Low cost current and saving account (CASA) deposits were 11 per cent higher at ₹8.4-lakh crore, accounting for 44.4 per cent of total deposits.

Capital Adequacy Ratio (CAR) of the bank stood at 19.3 per cent at the end of March, higher than 18.9 per cent a year ago. However, tier-1 capital was at 17.1 per cent, lower than 17.9 per cent in the previous year.

On a consolidated basis, HDFC Bank’s profit after tax rose 20.6 per cent YoY to ₹12,595 crore in Q4 FY23, and by 20.9 per cent to ₹45,997 crore in FY23.