HDFC Bank Q1 net profit rises 21% to Rs 5,586 crore; asset quality falters

HDFC Bank posted a 21 per cent increase in its net profit on an annual basis for the quarter ended June 30, 2019. The standalone net profit for the quarter under review jumped to Rs 5,586 crore, in comparison to a net profit of Rs 4,601.44 crore reported during the corresponding quarter last year.

Standalone Net Interest Income (NII) increased 22.94 per cent year-on-year (YoY) to Rs 13,294.25 crore for the quarter ended June 30, 2019. The private lender's NII for the same period last year was Rs 10,813.57 crore. HDFC Bank saw its provisions and contingencies swell by 60 per cent YoY during Q1 FY20 to Rs 2,613.66 crore, in comparison to Rs 1,629.37 crore during the corresponding period last fiscal.

For the first quarter of financial year 2019-20, HDFC Bank reported gross non-performing assets (NPA) at 1.40 per cent of gross advances, as against 1.33 per cent as on June 30, 2018. Net non-performing assets were at 0.4 per cent of net advances as on June 30, 2019.

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HDFC Bank held floating provisions of Rs 1,451 crore as on June 30, 2019, the private lender said in a statement. Total provisions (comprising specific provisions, general provisions and floating provisions) were 115 per cent of the gross non-performing loans as on June 30, 2019, it further added.

The standalone operating profit before provision and contingencies during Q1 FY20 rose 28.90 per cent YoY to Rs 11,147.24 crore, as opposed to Rs 8,647.75 crore during the corresponding period last year.

As of June 30, 2019, HDFC reported an increase of 18.5 per cent in total deposits to Rs 9.54 lakh crore. CASA deposits grew by 12.8 per cent with savings account deposits at Rs 2.53 lakh crore and current account deposits at Rs 1.25 lakh crore. Time deposits during the quarter under review were at Rs 5.75 lakh crore, marking an increase of 22.5 per cent over the previous year, resulting in CASA deposits comprising 39.7 per cent of total deposits as of June 30, 2019.

The Bank maintained a healthy liquidity coverage ratio at 126 per cent, well above the regulatory requirement, HDFC Bank said in its statement.

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Announcing the financial results for the June quarter, the HDFC bank board of directors also declared a special interim dividend of Rs 5 per equity share of Rs 2 each for the financial year 2019-20. The dividend has been announced to commemorate the private lender completing 25 years of operations. Effect of the said dividends has been reckoned in determining capital funds in the computation of the capital adequacy ratio.

The record date for the purpose of ascertaining the entitlement of special interim dividend would be August 2, 2019. The date of payment of dividend in electronic form would be August 13, 2019 onwards, and physical dividend warrants would be dispatched from August 13, 2019 onwards.

Edited by Vivek Punj