HDFC Bank registers 20 pc y-o-y increase in net profit to Rs 6,659 cr in Q1 FY21
Mumbai/IBNS: HDFC bank on Saturday declared 19.58 per cent increase in net profit for the quarter ended June 30 compared to the corresponding quarter of 2019. The private lender's net profit for the first quarter of this fiscal stood at Rs 6,658.62 crore compared to Rs 5,568.16 of the corresponding period last year.
The net interest income grew by 17.8 per cent to Rs15,665.4 crore from Rs13,294.3 crore of the same period of the previous year, driven by growth in advances of 20.9 per cent, and a growth in deposits of 24.6 per cent.
Provisions and contingencies for the quarter ended June 30, 2020 were Rs 3,891.5 crore (consisting of specific loan loss provisions of Rs 2,739.8 crore and general provisions and other provisions of Rs 1,151.7 crore) as against Rs 2,613.7 crore (consisting of specific loan loss provisions of Rs 2,248.0 crore and general provisions and other provisions of Rs 365.7 crore) for the quarter ended June 30, 2019.
Total provisions for the current quarter included contingent provisions of approximately Rs 1,000 crore.
Pre-provision Operating Profit (PPOP) at Rs 12,829.3 crore grew by 15.1 per cent over the corresponding quarter of the previous year.
Gross non-performing assets were at 1.36 per cent of gross advances in Q1FY21 as against 1.26 per cent in Q4FY20.
"During the quarter, the Bank has used its analytical models to determine slippages, resulting in a more expedited recognition of NPAs, as well as accelerated corresponding specific provisions. The Bank also continues to hold provisions as on June 30, 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.
"The continued slowdown in economic activity has led to a decrease in retail loan origination, sale of third party products, use of credit and debit cards by customers, efficiency in collection efforts and waivers of certain fees. As a result, fees/other income were lower by approximately Rs 2,000 crore," the bank added.
The operating expenses for the quarter under review were Rs 6,911.5 crore, a decrease of 2.9 per cent over Rs 7,117.3 crore during the corresponding quarter of the previous year.
The cost-to-income ratio for the quarter was at 35.0 per cent as against 39.0 per cent for the corresponding quarter ended June 30, 2019. Operating expenses were lower primarily due to lower loan origination and sales volumes.
The Bank held floating provisions of Rs 1,451 crore and contingent provisions of Rs 4,002 crore as on June 30, 2020. Total provisions (comprising specific, floating, contingent and general provisions) were 149 per cent of the gross non-performing loans as on June 30, 2020.
The shares of HDFC Bank traded 3.46 per cent higher at Rs 1,099.15 ahead of quarterly results.