HDFC Bank Q3 results: Net profit rises 18% to Rs 8,758 crore; NII grows 15%

HDFC Bank reported 18.1 per cent increase in net profit for the quarter ended December 31, 2021. For the quarter under review, the private sector lender posted a standalone net profit of Rs 8,758.29 crore, as opposed to Rs 7,416.48 crore in the year-ago period.

The rise in net profit came on the back of increase in net interest income (NII), the difference between interest earned and interest expended. The bank's NII for December quarter this fiscal grew 15.1 per cent to Rs 16,317.6 crore from Rs 14,172.19 crore in the corresponding quarter last fiscal. Advances growth of 15.6 per cent and core net interest margin of 4.2 per cent drove the rise in NII.

Net revenues, the sum of NII and other income, grew to Rs 23,760.8 crore for in Q3 FY21, up 14 per cent from Rs 20,842.2 crore in Q3 FY20. Operating expenses during the quarter increased 8.6 per cent to Rs 8,574.8 crore from Rs 7,896.8 crore in the same period of previous fiscal. The cost-to-income ratio for the quarter under review was at 36.1 per cent opposed to 37.9 per cent for the quarter ended December 31, 2019. Pre-provision Operating Profit (PPOP) at Rs 15,186.0 crore grew by 17.3 per cent over the year-ago period.

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Provisions and contingencies for the December quarter this fiscal were Rs 3,414.1 crore, including specific loan loss provisions of Rs 691.2 crore and general and other provisions of Rs 2,722.9 crore. The same for corresponding period last year was Rs 3,043.6 crore, consisting of specific loan loss provisions of Rs 2,883.6 crore and general and other provisions of Rs 159.9 crore) for the quarter ended December 31, 2019.

Total deposits with HDFC Bank, as of December 31, 2020, were Rs 1,271,124 crore, an increase of 19.1 per cent over December 31, 2019. CASA deposits, comprising 43 per cent of total deposits, grew by 29.6 per cent with savings account deposits at Rs 374,639 crore and current account deposits at Rs 172,108 crore. Time deposits were at Rs 724,377 crore, an increase of 12.2 per cent over the corresponding quarter of the previous year.

Total advances as of December 31, 2020, were Rs 1,082,324 crore, an increase of 15.6 per cent over December 31, 2019. Domestic advances grew by 14.9 per cent over December 31, 2019.

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As on December 31, 2020, the gross and net non-performing assets were at 0.81 per cent of gross advances and 0.09 per cent of net advances, respectively. The restructuring under RBI resolution framework for COVID-19 was approximately 0.5 per cent of advances.

Supreme Court of India has directed that accounts which were not declared NPA till August 31, 2020, shall not be declared as such until further orders. Awaiting further directions in the matter, HDFC Bank said it has made a contingent provision in respect of these accounts.

"The Bank also continues to hold provisions as on December 31, 2020, against the potential impact of COVID-19 based on the information available at this point in time and the same are in excess of the RBI prescribed norms," HDFC Bank said in a regulatory filing.

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