On Monday, HDFC Bank shares will be in focus following its earnings announcements. This week, on Friday, HDFC Bank shares closed at ₹1363.85 apiece up by ₹12.55 or 0.93% on BSE.
Here are 10 key highlights from the Q1FY23 earnings:
Interest income:
HDFC Bank posted a net interest income (NII) of ₹19,481.4 crore in Q1FY23 up by 14.5% from ₹17,009 crore in the same period last year, driven by advances and deposits that recorded growth of 22.5% and 19.2% respectively. Also, the total balance sheet which witnessed a growth of 20.3% supported the performance.
In Q1FY23, the core net interest margin stood at 4% on total assets, and 4.2% based on interest-earning assets.
The lender continued to add new liability relationships at a robust pace of 2.6 million in the quarter.
Other Income:
During the quarter, the four components in the other income were – fees and commissions of ₹5,360.4 crore up from ₹3,885.4 crore in Q1FY22; while foreign exchange and derivatives revenue stood at ₹1,259.3 crore up from ₹1,198.7 crore of Q1FY22; loss on sale/revaluation of investments of ₹1,311.7 crore higher from ₹601 crore in Q1FY22; and miscellaneous income including recoveries and dividend stood at ₹1,080.2 crore up from ₹603.5 crore of Q1FY22.
Other income excluding trading Mark to Market losses increased by 35.4% year-on-year.
Net income:
HDFC Bank registered a profit before tax (PBT) of ₹12,180.1 crore in Q1FY23 rising by 18.2% over the corresponding quarter of the previous year. The PBT comes after taking into consideration trading and Mark to Market losses of ₹1,311.7 crore in the quarter.
After deducting taxation of ₹2,984.1 crore, HDFC Bank garnered a net profit of ₹9,196 crore in Q1FY23 increasing by 19% from the same period last year.
Provisions:
Provisions and contingencies came in at ₹3,187.7 crore in Q1FY23 against ₹4,830.8 crore in the same quarter a year ago.
As of June 30, 2022, the bank had held provisions of ₹1,451 crore and contingent provisions stood at ₹9,630 crore. Total provisions which comprise specific, floating, contingent, and general provisions – came in at 170% of the gross non-performing loans in the quarter under review.
Pre-provision operating profit (PPOP) stood at ₹15,367.8 crore. PPOP excluding trading and Mark to Market losses rose by 14.7% year-on-year.
Asset quality:
As of June 30, 2022, gross non-performing assets were at 1.28% of gross advances (1.06% excluding NPAs in the seasonal agricultural segment) compared to 1.47% of Q1FY22 (1.26% excluding NPAs in the seasonal agricultural segment. In the March 2022 quarter, the gross NPA was at 1.17%.
In value terms, gross NPA at ₹18,033.67 crore in Q1FY23 against ₹16,140.96 crore in Q4FY22 and ₹17,098.51 crore in Q1FY22.
Net non-performing assets stood at 0.35% versus 0.32% in Q4FY22 and 0.48% of Q1FY22.
The total credit cost ratio was at 0.91% compared to 1.67% in the June quarter of last year.
Deposits:
The bank posted robust growth in total deposits to ₹1,604,760 crore in Q1FY23 increasing by 19.2% yoy. CASA deposits climbed 20.1% with savings account deposits at ₹5,14,063 crore and current account deposits at ₹2,20,584 crore. Further, in Q1, time deposits came in at ₹8,70,113 crore up by 18.5% yoy – resulting in CASA deposits comprising 45.8% of total deposits.
Advances:
In Q1FY23, HDFC Bank recorded total advances of ₹1,395,068 crore increasing by 21.6% yoy. Gross of transfers through inter-bank participation certificates and bills rediscounted, total advances rose by around 22.5% compared to last year same period.
During the quarter, retail loans increased 21.7%, commercial and rural banking loans soared 28.9%, and corporate and other wholesale loans surged 15.7%. Overseas advances constituted 3.5% of total advances.
Capital Adequacy:
HDFC Bank’s total capital adequacy ratio (CAR) as per Basel III guidelines was at 18.1% as of June 30, 2022, compared to 19.1% of the corresponding period last year. This is higher than the regulatory requirement of 11.7% which includes a Capital Conservation Buffer of 2.5%, and an additional requirement of 0.2% on account of the Bank being identified as a Domestic Systematically Important Bank (D-SIB).
Tier 1 CAR stood at 17.1% in Q1FY23 compared to 17.9% in Q1FY22. Meanwhile, the Common Equity Tier 1 Capital ratio is at 16.5% in Q1FY23. Risk-weighted assets stood at ₹1,398,442 crore versus ₹1,153,559 crore of June 2021 quarter.
New Additions:
The bank added 36 branches and 10,932 employees during the quarter. Over the last twelve months, the lender added 725 branches and 29,038 employees.
Network:
The bank’s distribution network stood at 6,378 branches and 18,620 ATMs/Cash deposit and withdrawal machines (CDMs) across 3,203 cities/towns in Q1FY23 as against 5,653 branches and 16,291 ATMs/CDMs across 2,917 cities/towns of June 2021 quarter.
As of June 30, 2022, the bank’s total employees count is 152,511 compared to 123,473 headcounts of Q1 last year.
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