HDFC Bank Q4 Results: Net Profit Flat, Provisions Surge Three Times

HDFC Bank Ltd. saw its net profit rise 0.84% sequentially on lower core income growth and higher provisions. Net profit for the quarter stood at Rs 16,512 crore, compared to Rs 16,372 crore.

Analysts polled by Bloomberg estimated a net profit of Rs 17,593 crore for the quarter. Year-on-year numbers are not comparable as the bank concluded its mega merger with Housing Development Finance Corp. on July 1, 2023.

Net interest income, or core income, was up 2% quarter-on-quarter to Rs 29,077 crore. Other income was up 63% at Rs 18,166 crore.

During the January-March quarter, the bank recorded one-time gains worth Rs 7,341.4 crore, owing to the sale of HDFC Credila to BPA EQT and ChrysCapital. The education finance company is no longer a subsidiary of HDFC Bank.

Net interest margin, on an interest earning asset basis, stood at 3.63% as of March 31, compared to 3.6% as of Dec. 31.

Srinivasan Vaidyanathan, chief financial officer, declined to give any guidance on margins during this fiscal. However, the bank will remain focussed on ensuring deposit accretion, without cutting pricing on loans, he said.

Asset quality for the lender remained stable, as gross non-performing asset ratio fell by 2 basis points sequentially to 1.24%. Net NPA ratio was flat at 0.33%

Provisions during the quarter rose three times quarter-on-quarter to Rs 13,512 crore. The provision number includes floating provisions worth Rs 10,900 crore of the bank in the January-March period.

"This floating provision is not in anticipation of any event as such. We felt this is an opportune time to make countercyclical provisions," Vaidyanathan said.

Total advances as of March 31 stood at over Rs 25 lakh crore, up 1.6% quarter-on-quarter. Total deposits for the bank were up 7.5% sequentially and stood at Rs 23.8 lakh crore.

Current account savings account ratio stood at 38.2%, up 50 bps quarter-on-quarter. The bank's board approved a dividend of Rs 19.5 per share for FY24 on Saturday.

"Our deposit strategy has remained intact," Vaidyanathan said. HDFC Bank saw Rs 1.6 lakh crore increase in total deposits during the January-March period. Of this, Rs 1.3 lakh crore came from retail deposits. As of March 31, 84% of the bank's total deposits are retail in nature, the bank's CFO said.