HDFC Bank's Third Quarter Report: Profit Surges by 34% to Rs 16,373 Crore, Aligns with Market Predictions; Notable Highlights.
In the current quarter, the net interest income (NII), representing the difference between interest earned and interest expended, witnessed a substantial YoY increase of 23.9%, reaching Rs 28,470 crore as opposed to Rs 22,990 crore recorded in the corresponding quarter of the previous year.
HDFC Bank Ltd announced a significant 33.54% year-on-year increase in standalone net profit, reaching Rs 16,372.54 crore for the December quarter, compared to Rs 12,259.49 crore in the same period last year. The reported profit aligns closely with market expectations. In terms of net interest income (NII), which represents the difference between interest earned and interest expended, there was a substantial YoY growth of 23.9%, totaling Rs 28,470 crore for the quarter, as opposed to Rs 22,990 crore in the corresponding quarter of the previous year. Although the NII growth slightly missed analyst estimates of 25%, the overall financial performance indicates a robust quarter for HDFC Bank.
The pre-provision operating profit experienced a significant surge of 24.3%, reaching approximately Rs 23,650 crore. However, provisions for the quarter witnessed an increase to about Rs 4,220 crore from Rs 2,810 crore in the same quarter of the previous year. HDFC Bank reported a core net interest margin (NIM) of 3.4% on total assets and 3.6% based on interest-earning assets.
Anticipating HDFC Bank Q3 Earnings: Expected 30% Profit Growth, Likelihood of NIM Recovery, Potential Rise in Provisions
As of December 31, 2023, the gross non-performing assets stood at 1.26% of gross advances, showing a decrease from 1.34% recorded on September 30, 2023, and a slight increase from 1.23% reported on December 31, 2022. In terms of net non-performing assets, the figure was at 0.31% of net advances as of December 31.
For the quarter ending on December 31, 2023, the non-interest revenue reached approximately Rs 11,140 crore, marking a significant increase from Rs 8,500 crore reported in the corresponding quarter of December 31, 2022. Within the components of other income, fees & commissions amounted to Rs 6,940 crore, showing growth from Rs 6,050 crore YoY.
Foreign exchange & derivatives revenue registered at Rs 1,210 crore compared to Rs 1,070 crore YoY, while net trading and mark-to-market gain stood at Rs 1,470 crore, a notable increase from the gain of Rs 260 crore YoY. Miscellaneous income, which includes recoveries and dividends, totaled Rs 1,520 crore, up from Rs 1,110 crore.
Operating expenses for HDFC Bank saw a 28.1% increase, reaching Rs 15,960 crore in comparison to Rs 12,460 crore in the corresponding quarter of the previous year. The cost-to-income ratio for the quarter was reported at 40.3%.
As per Basel II guidelines, HDFC Bank's total Capital Adequacy Ratio (CAR) stood at 18.4% as of December 31, 2023, compared to 19.4% YoY. This exceeds the regulatory requirement of 11.7%.
The bank's distribution network expanded to 8,091 branches and 20,688 ATMs across 3,872 cities/towns by the end of December 31, 2023, up from 7,183 branches and 19,007 ATMs across 3,552 cities/towns on December 31, 2022. Approximately 52% of branches were located in semi-urban and rural areas.
Additionally, HDFC Bank reported having 15,053 business correspondents, mainly manned by Common Service Centres (CSC). The employee count rose to 208,066 as of December 31, 2023, compared to 166,890 on December 31, 2022, according to a BSE filing.
In terms of loan growth, domestic retail loans surged by 111.1%, commercial and rural banking loans increased by 31.4%, and corporate and other wholesale loans (excluding non-individual loans of eHDFC Ltd of approximately Rs 98,900 crore) grew by 11.2%. Overseas advances constituted 1.7% of total advances.
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