HDFC Bank Q4 profit jumps 23% to ₹10,055 cr; asset quality improves

HDFC Bank, which recently announced a merger with Housing Development Finance Corporation (HDFC), has reported strong earnings in the March quarter of 2022 on the back of higher income and a decline in provisions. The country’s largest private sector lender by assets has posted 22.82% year-on-year (YoY) growth in its net profit at ₹10,055.2 crore for the fourth quarter ended March 31, 2021. The Mumbai-headquartered bank had registered a net profit of ₹8,186.51 crore in Q4 FY22, the bank said in a regulatory filing on April 16.

The net revenues (net interest income plus others income) increased by 7.3% to ₹26,509.8 crore in Q4 FY22, as against ₹24,714.1 crore in the same period last year. The total income rose 8% to ₹41,085.78 crore, compared with ₹38,017.50 in the year-ago period.

For the full financial year ended March 31, 2022, net profit grew 18.8% YoY to ₹36,961.3 crore, while total income climbed 7.7% YoY to ₹1.57 lakh crore during the year under review.

During the Jaunary-March quarter of 2022, HDFC Bank’s net interest income, the difference between interest earned and interest paid, rose 10.2% to ₹18,872.7 crore compared to ₹17,120.2 crore for the quarter ended March 31, 2021.

Non-interest income (comprising fee, services, and other income) grew by 28.8% to ₹7,637.1 crore over ₹7,593.9 crore in Q4 FY21. Income from fees and commissions increased to ₹5,603.3 crore from ₹5,023.3 crore in the same period last year.

The bank's operating expenses rose by 14.9% to Rs 9.851 crore in Q3 FY22, from Rs 8,575 crore in Q3 FY21.

Provision and contingencies dropped to ₹3,312.4 crore in the January-March quarter of 2022 as against ₹4,693.7 crore in March 2021. The provisions for the current quarter included contingent provisions of around ₹1,000 crore, the bank said in the filing.

On the asset quality front, gross non-performing assets (NPAs) ratio as a percentage of gross advances dropped to 1.17% as against 1.26% in December 2021 and 1.31% in March quarter of 2021. The net NPA ratio too fell to 0.32%, over 0.37% in Q3 FY22 and 0.4% in the year-ago quarter. In absolute terms, the bank's gross NPA stood at ₹16,141 crore and net NPA stood at ₹4,408 crore as of March 31, 2022.

As of March 31, 2022, HDFC Bank's total balance sheet size stood at ₹20.68 lakh crore, up 18.4% on a year-on-year basis. Total deposits rose 16.8% YoY to ₹15.59 lakh crore, while total advances increased by 20.8% to ₹13.68 lakh crore.

The bank’s total capital adequacy ratio (CAR) as per Basel III norms was at 18.9% as on March 31, 2021, against a regulatory requirement of 11.7%.

Ahead of Q4 results, shares of HDFC Bank closed 1.9% lower at ₹1,464.85 apiece on the BSE on Wednesday.