A remarkable trajectory of growth was demonstrated by HDFC Bank Ltd. as it reported a significant increase in its fourth-quarter standalone net profit, recording a 37.1% leap to ₹16,512 crore, a substantial rise from ₹12,047 crore observed in the comparative period of the previous year. This financial upswing is primarily attributed to a substantial 24.5% surge in net interest income (NII), which reached ₹29,080 crore.
Further examining the Bank’s financial health, the core net interest margin stood at 3.44% when calculated against total assets, and ascended to 3.63% with respect to interest-earning assets. The private sector banking behemoth disclosed these details in a regulatory filing.
Striding into the full fiscal year’s performance, the bank’s profit after tax realized an even more impressive year-on-year increase of 37.9%, closing at ₹60,810 crore for the 12 months concluding on March 31.
In a move that certainly appeased its shareholders, the Board of Directors at HDFC Bank proposed to pay out a dividend amounting to ₹19.5 per each equity share, which holds a face value of ₹1. This recommendation concerns the financial year that wrapped up on March 31, 2024.
During a post-earnings conference call, the CFO of HDFC Bank, Srinivasan Vaidyanathan, offered insights into the current credit milieu, remarking, “The credit environment in the economy remains benign, and the bank’s credit performance across all segments continues to remain healthy.” He also noted a slight improvement in the bank’s Gross Non-Performing Assets (GNPA) which settled at 1.24%, a marginal enhancement from the preceding quarter.
Elaborating on the strategic direction of the Bank regarding risk mitigation, Vaidyanathan expressed that HDFC Bank deemed it prudent to bolster its floating provisions, which serve as a counter-cyclical protective measure ensuring the balance sheet’s resilience. These funds, which to date amount to a substantial ₹10,900 crore, also boost the bank’s Tier 2 Capital within the advantageous bounds of regulatory limits.
The Bank provided further details on the provisions and contingencies for the quarter ending March 31, which included the aforementioned floating provisions, accounting for ₹13,510 crore. Excluding these floating provisions, provisions and contingencies showed a mild dip to ₹2,610 crore from ₹2,690 crore when compared to the same quarter of the previous year.
In terms of overall credit cost ratio, which also excludes the floating provisions, HDFC Bank reported a decrease to 0.42% vis-à-vis the 0.67% recorded for the quarter concluding on March 31, 2023.
Demonstrating robust growth in its deposit and lending activities, the bank reported a 26.4% escalation in total deposits, amounting to ₹23,79,800 crore as of March 31, 2024. Additionally, gross advances witnessed an extraordinary 55.4% jump to ₹25,07,800 crore.
Moreover, the bank maintained a stable asset quality, with gross non-performing assets constituting 1.24% of gross advances as of March 31, 2024. This is a slight decrease from 1.26% as of the previous quarter’s end, and a small uptick from 1.12% on March 31, 2023. Net non-performing assets reflected a rate of 0.33% of net advances as of the end date of the reported quarter.
On the consolidated front, HDFC Bank’s profit after tax for the quarter under review grew by 30.9% reaching ₹17,620 crore. For the entire year, the consolidated profit after tax soared by an impressive 39.3% to ₹64,060 crore, marking a year of strong financial performance for one of India’s prominent private sector financial institutions.
