Here are the key takeaways from HDFC Bank’s second quarter results:
3rd consecutive quarter of growth below 20%
Earnings growth for the quarter at 18.41 percent was the third consecutive quarter of growth below 20 percent for HDFC Bank. The lender reported earnings growth of 19.58 percent in June and 17.71 percent in the March quarter, data compiled from the AceEquity database suggests.
That said, growth for the September quarter was delivered on a high basis. The private lender had reported nearly 26.75 percent in the base quarter. The profit figure of 7,315 crore announced on Saturday beat ET NOW’s survey estimate of 6,445 crore.
NIM in a minimum of multiple quarters
The NIM reported for the quarter at 4.1 percent was the lowest for the bank in at least nine quarters. The private bank reported a NIM of 4.3 percent each in the June and March quarters. It reported 4.2% of NIM each for the December and September 2019 quarters. In fact, the NIM was as high as 4.4% in the March 2019 quarter.
Provisions related to Covid
The bank said it had 1,451 million rupees in floating provisions and 6,304 million rupees in contingent provisions as of September 30. These provisions, he said, were 195% of reported gross NPAs or 154% of gross performance NPAs as of September 30.
For the September quarter, the lender made provisions of Rs 3,703.50 crore, which was less than the Rs 3,891.52 crore in the June quarter but higher than the prior year Rs 2,700 crore in the same quarter. from the previous year.
Provisions and contingencies for the September quarter included provisions for specific credit losses of Rs 1,240.60 crore and general and other provisions of Rs 2,462.90 crore.
Strong asset quality
Even if the bank accounted for borrower accounts classified as NPA after August 31 and also adopted an early recognition of the NPA using analytical models, the gross NPA would have remained stable at 1.38% for the September quarter in comparison. with 1.36% in June. quarter and 1.38 percent in the September quarter of last year.
Since those accounts were not included, the bank reported a lower gross NPA of 1.08 percent for the September quarter.
Commission income falls
The bank said its fee income for the quarter was down by 800 million rupees. While the June quarter was the hardest hit by the Covid-19 pandemic, part of the weakness continued in the September quarter as well, causing lower retail loan origination, debit and credit card use by customers, efficiency in collection efforts, and waiver of certain fees, it said.
New CEO and CEO Appointed
Along with the results, the bank appointed Sashidhar Jagdishan as an additional director and managing director and chief executive officer of the bank for a period of three years from October 27, as approved by the Reserve Bank of India in its mail. email dated August 3. Jagdishan’s approval would be subject to the approval of the bank’s shareholders by remote electronic voting, according to MCA circulars.
Strong deposit, advanced growth
Total deposits increased 20.30 percent year-on-year to Rs 12,29,310 crore as of September 30, while advances increased 15.8% to Rs 10,38,335 crore. Domestic retail loans grew 5.3%, while wholesale loans increased 26.5% in the quarter. Overall, retail loans accounted for 48 percent of total advances. Loans abroad represented 3 percent of total advances.
.
