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Mumbai, NFAPost: HDFC Bank, the leading private sector lender in India, registered a standalone net profit of Rs 10,342 crore for the third quarter ending December 30, 2021, registering a growth of 18% year-on-year amid the impact of growing influence of Covid-19 and backed by decline in bad loan provisions.

It is to be noted that the profit in the corresponding quarter last fiscal was at Rs 8,758.29 crore. Net interest income, the difference between interest earned and interest expended, climbed 13% to Rs 18,444 crore in Q3FY22, with a net interest margin at 4.1% for the quarter, and healthy credit growth of 16.4%. Profit and net interest income grew by 17% and 4.3% on a sequential basis in Q3.

STANDALONE FINANCIAL RESULTS:

Profit & Loss Account: Quarter ended December 31, 2021. The Bank’s net revenues (net interest income plus other income) increased by 12.1% to Rs 26,627.0 crore for the quarter ended December 31, 2021 from Rs 23,760.8 crore for the quarter ended December 31, 2020.

Net interest income (interest earned less interest expended) for the quarter ended December 31, 2021 grew by 13.0% to Rs 18,443.5 crore from Rs 16,317.6 crore for the quarter ended December 31, 2020. Advances grew at 16.5% reaching new heights driven through relationship management, digital offering and breadth of products.

Core net interest margin was at 4.1%. New liability relationships added during the quarter remained at an all time high. This continued focus on deposits helped in the maintenance of a healthy liquidity coverage ratio at 123%, well above the regulatory requirement, which positions the Bank favorably to capitalise on growth opportunities.

Other income (non-interest revenue) at Rs 8,183.6 crore was 30.7% of net revenues for the quarter ended December 31, 2021 and grew by 9.9% over Rs 7,443.2 crore in the corresponding quarter of the previous year. The four components of other income for the quarter ended December 31, 2021 were fees & commissions of Rs 5,075.1 crore (Rs 4,974.9 crore in the corresponding quarter of the previous year), foreign exchange & derivatives revenue of Rs 949.5 crore (Rs 562.2 crore in the corresponding quarter of the previous year), gain on sale / revaluation of investments of ₹ 1,046.5 crore (Rs 1,109.0 crore in the corresponding quarter of the previous year) and miscellaneous income, including recoveries and dividend, of Rs 1,112.5 crore (Rs 797.1 crore in the corresponding quarter of the previous year).

It is interesting to note that the bank added 294 branches and 16,852 people over the last twelve months and made other investments to position ourselves and capitalise on the growth opportunity. Operating expenses for the quarter ended December 31, 2021 were Rs 9,851.1 crore, an increase of 14.9% over Rs 8,574.8 crore during the corresponding quarter of the previous year. The cost-to-income ratio for the quarter was at 37.0%.

Pre-provision Operating Profit (PPOP) at Rs 16,776.0 crore grew by 10.5% over the corresponding quarter of the previous year.

Provisions and contingencies for the quarter ended December 31, 2021 were Rs 2,994.0 crore (consisting of specific loan loss provisions of Rs 1,820.6 crore and general and other provisions of Rs 1,173.4 crore) as against total provisions of Rs 3,414.1 crore for the quarter ended December 31, 2020. Total provisions for the current quarter included contingent provisions of approximately Rs 900 crore.

The total credit cost ratio was at 0.94%, as compared to 1.30% for the quarter ending September 30, 2021 and 1.25% for the quarter ending December 31, 2020.

Profit before tax (PBT) for the quarter ended December 31, 2021 at Rs 13,782.0 crore grew by 17.1% over the corresponding quarter of the previous year. After providing Rs 3,439.8 crore for taxation, the Bank earned a net profit of Rs 10,342.2 crore, an increase of 18.1% over the quarter ended December 31, 2020.

Balance Sheet: As of December 31, 2021

Total balance sheet size as of December 31, 2021 was ₹ 1,938,286 crore as against ₹1,654,228 crore as of December 31, 2020, a growth of 17.2%.

Total deposits as of December 31, 2021 were ₹ 1,445,918 crore, an increase of 13.8% over December 31, 2020. CASA deposits grew by 24.6% with savings account deposits at ₹ 471,029 crore and current account deposits at ₹ 210,195 crore. Time deposits were at ₹ 764,693 crore, an increase of 5.6% over the corresponding quarter of the previous year, resulting in CASA deposits comprising 47.1% of total deposits as of December 31, 2021.

Total advances as of December 31, 2021 were ₹ 1,260,863 crore, an increase of 16.5% over December 31, 2020. Retail loans grew by 13.3%, commercial and rural banking loans grew by 29.4% and corporate and other wholesale loans grew by 7.5%. Overseas advances constituted 3.4% of total advances.

Capital Adequacy:

The Bank’s total Capital Adequacy Ratio (CAR) as per Basel III guidelines was at 19.5% as on December 31, 2021 (18.9% as on December 31, 2020) as against a regulatory requirement of 11.7% which includes Capital Conservation Buffer of 2.5%, and an additional requirement of 0.2% on account of the Bank being identified as a Domestic Systemically Important Bank (D-SIB). Tier 1 CAR was at 18.4% as of December 31, 2021 compared to 17.6% as of December 31, 2020. Common Equity Tier 1 Capital ratio was at 17.1% as of December 31, 2021. Risk-weighted Assets were at ₹ 1,267,426 crore (as against ₹ 1,091,721 crore as at December 31, 2020).

NETWORK

As of December 31, 2021, the Bank’s distribution network was at 5,779 branches and 17,238 ATMs / Cash Deposit & Withdrawal Machines (CDMs) across 2,956 cities / towns as against 5,485 branches and 15,541 ATMs / CDMs across 2,866 cities / towns as of December 31, 2020. 50% of our branches are in semi-urban and rural areas. In addition, we have 15,700 business correspondents, which are primarily manned by Common Service Centres (CSC) as against 13,675 business correspondents as of December 31, 2020. Number of employees were at 134,412 as of December 31, 2021 (as against 117,560 as of December 31, 2020).

ASSET QUALITY

Gross non-performing assets were at 1.26% of gross advances as on December 31, 2021, as against 1.35% as on September 30, 2021 and 1.38% (Proforma approach) as on December 31, 2020. Net non-performing assets were at 0.37% of net advances as on December 31, 2021.

The Bank held floating provisions of ₹ 1,451 crore and contingent provisions of ₹ 8,636 crore as on December 31, 2021. Total provisions (comprising specific, floating, contingent and general provisions) were 172% of the gross non-performing loans as on December 31, 2021.

SUBSIDIARIES

The Bank’s subsidiary companies prepare their financial results in accordance with the notified Indian Accounting Standards (‘Ind-AS’). The Bank for the purposes of its statutory compliance prepares and presents its financial results under Indian GAAP.

Hence the Bank’s subsidiary companies, for the purposes of the consolidated financial results of the Bank, prepare ‘fit-for-consolidation information’ based on the recognition and measurement principles as per Indian GAAP. The financial numbers of the Bank’s subsidiary companies mentioned herein below are in accordance with Ind-AS.

HDFC Securities Limited (HSL) is amongst the leading retail broking firms in India. As on December 31, 2021, the Bank held 96.0% stake in HSL. For the quarter ended December 31, 2021, HSL’s total income grew by 58% to ₹ 535.6 crore, as against ₹ 339.1 crore for the quarter ended December 31, 2020. Profit after tax for the quarter grew by 58% to ₹ 258.0 crore, as against ₹ 163.2 crore for the quarter ended December 31, 2020.

As on December 31, 2021, HSL had 213 branches across 147 cities / towns in the country.

HDB Financial Services Limited (HDBFSL) is a non-deposit taking non-banking finance company (‘NBFC’) offering wide range of loans and asset finance products to individuals, emerging businesses and micro enterprises. As on December 31, 2021, the Bank held 95.0% stake in HDBFSL.

The total loan book was ₹ 60,478 crore as on December 31, 2021 as against ₹ 60,068 crore as on December 31, 2020. Liquidity coverage ratio was healthy at 222%.

For the quarter ended December 31, 2021, HDBFSL’s net revenue was at ₹ 1,981.6 crore as against ₹ 1,723.7 crore for the quarter ended December 31, 2020, a growth of 15.0%. Profit after tax for the quarter ended December 31, 2021 was ₹ 304.1 crore compared to a loss of ₹ 146.2 crore for the quarter ended December 31, 2020 and a profit after tax of ₹ 191.7 crore for the quarter ended September 30, 2021.

Stage 3 loans were at 6.05% of gross loans. Total CAR was at 20.3% with Tier-I CAR at 14.9% as on December 31, 2021.

As on December 31, 2021, HDBFSL had 1,328 branches across 965 cities / towns.

CONSOLIDATED FINANCIAL RESULTS

The consolidated net profit for the quarter ended December 31, 2021 was ₹ 10,591 crore, up 20.8%, over the quarter ended December 31, 2020. Consolidated advances grew by 15.8% from ₹ 1,133,410 crore as on December 31, 2020 to ₹ 1,312,142 crore as on December 31, 2021.

The consolidated net profit for the nine months ended December 31, 2021 was ₹ 27,610 crore, up 18.0%, over the nine months ended December 31, 2020.

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