The largest private bank in the country (by market capitalization), HDFC Bank recorded a year-on-year (YoY) increase of 18.2 percent in its first quarter net profit of Rs 4,601.44 crore without expectations due to the lower than expected growth in the interest income .
The bank had recorded an independent net profit of Rs 3,893.84 crore for Q1FY18. A Reuters poll of equity analysts was expecting HDFC bank to see a 23 percent increase in its first-quarter net profit of 4,755.3 crore.
Net interest income (NII) increased by 15.4 percent, year-over-year, to Rs 10,813.57 million in Q1FY19. Analysts had estimated that NII will grow by 20 percent.
Provisions, NPAs see the marginal jump
The provisions of HDFC Bank for Q1 saw an increase of 4.5 percent to Rs 1,629.37 crore compared to Rs 1,558.76 crore in the period of the previous year. Of this, provisions for credit losses were at Rs. 1,432.2 million rupees in the first quarter, compared to the Rs. 1,343.2 million rupees for the period of the previous year.
The bank saw a marginal increase in unproductive assets (NPA) increased. The gross delinquency rate increased to 1.33 percent compared to 1.30 percent sequentially and 1.24 percent in the same period of the previous year.
The net NPA ratio dropped to 0.41 percent in Q1FY19 compared to 0.44 percent in the prior year period. In Q4FY18, it was at 0.40 percent.
In absolute terms, the gross NPA increased by 31.7 percent, year-over-year, to Rs 9,538.62 crore. The net NPA increased by 15 percent, year-over-year, to Rs 2,907.10 crore in the first quarter.
Other income, stable deposits
Other income (non-financial income) for the first quarter was Rs 3,818.1
million rupees, of which the income from commissions and in Rs 3,171.0 crore grew 23 percent a / a.
The bank’s total capital adequacy ratio (CAR) according to the Basel III guidelines was 14.6 percent at the end of the first quarter compared to 15.6 percent the previous year.
The size of HDFC Bank’s balance sheet at the end of the first quarter increased 20.6 percent to Rs 10.8 lakh crore compared to Rs 8.95 lakh crore a year ago.
The bank’s total deposits grew by 20 percent year-on-year to Rs 8.05 lakh crore at the end of the first quarter. From this, deposits in the savings account were Rs 2.27 lakh crore, showing an annual growth of 17.4 percent.
The total advances of HDFC Bank as of June 30, 2018 grew by 22 percent, year-over-year, to Rs 7.08 lakh crore. According to the classification of the regulatory segment, retail loans grew by 21.6 percent and wholesale loans grew by 22.7 percent.
The central cost-income ratio for the quarter was 40 percent compared to 42.7 percent in the period of the previous year.