HDFC Bank Q4 Results: Net Profit Rises 20% But Misses Estimates

India's largest private lender HDFC Bank saw its January-March quarter profit rise 20% year-on-year, on higher core income, lower provisions.

Net profit for the fourth quarter stood at Rs 12,047 crore, compared with Rs 10,055 crore a year ago. Analysts polled by Bloomberg estimated a net profit of Rs 12,137 crore for the quarter.

Net interest income, or core income, rose 24% from last year and stood at Rs 23,352 crore. Other income too rose 14.3% year-on-year to Rs 8,731 crore.

The four components of other income for the quarter ended March 31, 2023 were fees & commissions of Rs 6,628 crore, foreign exchange & derivatives revenue off Rs 1,010.5 crore, net trading and mark to market loss of Rs 37.7 crore and miscellaneous income, including recoveries and dividend, off 1,130 crore.

Asset quality for the quarter improved with gross non-performing asset ratio at 1.12%, down 11 basis points quarter-on-quarter. Net NPA ratio too improved 6 basis points sequentially to 0.27%.

Total provisions for the quarter fell 19% year-on-year and stood at Rs 2,685 crore in the March quarter.

Business Growth

Total deposits rose 21% year-on-year to Rs 18.8 lakh crore as of March 31, 2023. Low cost current account savings account deposits grew by 11.3% with savings account deposits at Rs 5.62 lakh crore and current account deposits at Rs 2.73 lakh crore. Time deposits were at Rs 10.47 lakh crore, an increase of 29.6% from a year ago.

Total advances as of March 31, 2023 were at slightly over Rs 16 lakh crore, an increase of 16.9% year-on-year. Domestic retail loans grew by 20.8%, commercial and rural banking loans grew by 29.8% and corporate and other wholesale loans grew by 12.6%.

For the quarter ended March 31, 2023, the lender's non-bank subsidiary HDB Financial Services reported a net revenue of Rs 2,262.5 crore in the fourth quarter, up 5.7% year-on-year. Net profit for the company stood at Rs 545.5 crore, up 28%.

HDB Financial's total loan book was Rs 70,031 crore as on March 31. Stage 3 loans, or loans were repayments were overdue for more than 90 days, were at 2.73% of gross loans. Total capital adequacy ratio was at 20.1% with Tier-I capital at 15.9%