HDFC Bank has reported a 19.58% increase in its net profit to ₹6658.62 crores in its 1st quarter ending June 30,2020, whereas the corresponding last year’s profit in the first quarter was ₹5568.16 crores. This is mainly due to the rise in the net interest income and the lower tax outgo. The bank’s net interest income (difference between the interest earned, and the interest expended) grew 17.8 % to ₹15665.4 crores, driven by growth in advances of 20.9 percent and a growth in deposits of 24.6 percent.
The Deposits grew up by 25 percent to approximately to ₹11,89,500 crores as of June 30 against ₹9,54,600 crores as on June 30,2019. Its Current and Saving account Deposits were, savings account deposits at ₹3.27 trillion and Current Account Deposits at ₹1.26 trillion. As of 30th June 2020, the current and savings comprises 40.1 % of its total deposits.
Provision and contingencies also increased to 48.89 percent year-on-year and 2.82 percent quarter on quarter to 3891.52 crore during the first quarter. The Banks’s total advances were ₹10.03 trillion, an increase of 20.09% over the same period last year. Overseas advances constituted to 3% of the total advances.
The Domestic Retail loans grew 7.2% and domestic wholesale loans grew up to 37.6 %. The Bank has also granted a second three-month moratorium on installments or interests as per the guidelines of the RBI (Reserve Bank of India).
HDFC Bank’s Asset quality also improved in the June quarter with percentage of bad loans declining to 1.36% year on year. The NPA ratio (Non-performing assets Ratio) was also down 10bps to 0.33% in the FY21, whereas the percentage of bad loans was up by 10bps in the March quarter of FY20. HDFC Bank uses analytical models to determine declines, resulting in recognition of the Non-performing assets.
The continued breakdown in the economic activity due to the covid-19 pandemic has led to decrease in retail loans, use of debit and credit card by the customers, sale of third-party products which led to the depreciation in the fess or other incomes by approximately ₹2000 crores. The Bank also holds provisions as on June 30th against the potential impact of covid-19. The bank has reported floating provisions of ₹1451 crores and contingent provisions of ₹4002 crores for the quarter ended June 30,2020. Total provisions were 149% of the gross non-performing loans.
Operating expenses lowered to 2.90% due to less sales and lower loan origination
