HDFC Q2 FY23 Results: Bank’s core net revenue grew by 18.3% to Rs 28,869.8 cr

New Delhi: The Board of Directors of HDFC Bank Limited approved the Bank’s (Indian GAAP) results for the quarter and half year that ended September 30, 2022, at its meeting held in Mumbai on Saturday, October 15, 2022. The accounts have been subjected to an audit by the statutory auditors of the Bank.

STANDALONE FINANCIAL RESULTS:

Profit & Loss Account: Quarter ended September 30, 2022

The Bank’s core net revenue (excluding trading and Mark to Market losses), grew by 18.3% to Rs 28,869.8 crore for the quarter that ended September 30, 2022 from Rs 24,409.7 crore for the quarter ended September 30, 2021. The total net revenues (net interest income plus other income) were Rs 28,616.7 crore for the quarter ended September 30, 2022.

Net interest income (interest earned less interest expended) for the quarter ended September 30, 2022 grew by 18.9% to Rs 21,021.2 crore from Rs 17,684.4 crore for the quarter ended September 30, 2021. Core net interest margin was at 4.1% on total assets, and 4.3% based on interest earning assets.

The four components of other income for the quarter ended September 30, 2022 were fees & commissions of Rs 5,802.9 crore (Rs 4,945.9 crore in the corresponding quarter of the previous year), foreign exchange & derivatives revenue of Rs 947.8 crore (Rs 867.3 crore in the corresponding quarter of the previous year), loss on sale/revaluation of investments of Rs 253.1 crore (gain of Rs 675.5 crore in the corresponding quarter of the previous year) and miscellaneous income, including recoveries and dividend, of Rs 1,097.9 crore (Rs 912.1 crore in the corresponding quarter of the previous year). Other income, excluding trading and Mark to Market losses, grew by 16.7% over the quarter ended September 30, 2021.

Operating expenses for the quarter ended September 30, 2022 were Rs 11,224.6 crore, an increase of 21.0% over Rs 9,277.9 crore during the corresponding quarter of the previous year. The cost-to-income ratio for the quarter was at 39.2%.

Pre-provision Operating Profit (PPOP) was at Rs 17,392.2 crore. PPOP, excluding trading and Mark to Market losses, grew by 16.6% over the quarter ended September 30, 2021.

Provisions and contingencies for the quarter ended September 30, 2022 were Rs 3,240.1 crore (consisting of specific loan loss provisions of Rs 3,000.4 crore and general and other provisions of Rs 239.7 crore) as against Rs  3,924.7 crore for the quarter ended September 30, 2021.

The total credit cost ratio was at 0.87%, as compared to 1.30% for the quarter ending September 30, 2021.

Profit before tax (PBT) for the quarter ended September 30, 2022 was at Rs 14,152.0 crore. After providing Rs 3,546.3 crore for taxation, the Bank earned a net profit of Rs 10,605.8 crore, an increase of 20.1% over the quarter ended September 30, 2021.

Balance Sheet: As of September 30, 2022

Total balance sheet size as of September 30, 2022 was Rs 2,227,893 crore as against Rs 1,844,845 crore as of September 30, 2021, a growth of 20.8%.

Total Deposits showed a healthy growth and were at Rs 1,673,408 crore as of September 30, 2022, an increase of 19.0% over September 30, 2021. CASA deposits grew by 15.4% with savings account deposits at Rs 529,745 crore and current account deposits at Rs 229,951 crore. Time deposits were at Rs 913,712 crore, an increase of 22.1% over the corresponding quarter of the previous year, resulting in CASA deposits comprising 45.4% of total deposits as of September 30, 2022.

Total advances as of September 30, 2022 were Rs 1,479,873 crore, an increase of 23.4% over September 30, 2021. Gross of transfers through inter-bank participation certificates and bills rediscounted, total advances grew by around 25.8% over September 30, 2021. Domestic retail loans grew by 21.4%, commercial and rural banking loans grew by 31.3% and corporate and other wholesale loans grew by 27.0%. Overseas advances constituted 3.1% of total advances.

Half Year ended September 30, 2022

For the half year ended September 30, 2022, the Bank earned a total income of Rs 87,742.2 crore as against Rs 75,525.6 crore in the corresponding period of the previous year. Net revenues (net interest income plus other income) for the half year ended September 30, 2022 were Rs 54,486.4 crore, as against Rs 48,382.6 crore for the half year ended September 30, 2021. Net profit for the half year ended September 30, 2022 was Rs 19,801.8 crore, up by 19.5% over the corresponding half year ended September 30, 2021.

Capital Adequacy:

The Bank’s total Capital Adequacy Ratio (CAR) as per Basel III guidelines (including profits for the half year ended September 30, 2022) was at 18.0% as on September 30, 2022 (20.0% as on September 30, 2021) as against a regulatory requirement of 11.7% which includes Capital Conservation Buffer of 2.5%, and an additional requirement of 0.2% on account of the Bank being identified as a Domestic Systemically Important Bank (D-SIB). Tier 1 CAR was at 17.1% as of September 30, 2022 compared to 18.7% as of September 30, 2021. Common Equity Tier 1 Capital ratio was at 16.3% as of September 30, 2022. Risk-weighted Assets were at ? 1,477,855 crore (as against Rs 1,190,270 crore as at September 30, 2021).

NETWORK

As of September 30, 2022, the Bank’s distribution network was at 6,499 branches and 18,868 ATMs / Cash Deposit & Withdrawal Machines (CDMs) across 3,226 cities / towns as against 5,686 branches and 16,642 ATMs / CDMs across 2,929 cities / towns as of September 30, 2021. 50% of our branches are in semi-urban and rural areas. In addition, we have 15,691 business correspondents, which are primarily manned by Common Service Centres (CSC). Number of employees were at 161,027 as of September 30, 2022 (as against 129,341 as of September 30, 2021).

ASSET QUALITY

Gross non-performing assets were at 1.23% of gross advances as on September 30, 2022, as against 1.35% as on September 30, 2021. Net non-performing assets were at 0.33% of net advances as on September 30, 2022.

SUBSIDIARIES

The Bank’s subsidiary companies prepare their financial results in accordance with the notified Indian Accounting Standards ('Ind-AS'). The Bank for the purposes of its statutory compliance prepares and presents its financial results under Indian GAAP. Hence the Bank’s subsidiary companies, for the purposes of the consolidated financial results of the Bank, prepare 'fit-for-consolidation information' based on the recognition and measurement principles as per Indian GAAP. The financial numbers of the Bank’s subsidiary companies mentioned herein below are in accordance with Ind-AS.

HDFC Securities Limited (HSL) is amongst the leading retail broking firms in India. As on September 30, 2022, the Bank held 95.8% stake in HSL. For the quarter ended September 30, 2022, HSL’s total revenue was at Rs 468.2 crore, as against Rs 489.5 crore for the quarter ended September 30, 2021. Profit after tax for the quarter was at Rs 190.9 crore, as against Rs 239.6 crore for the quarter ended September 30, 2021.

As on September 30, 2022, HSL had 215 branches across 147 cities / towns in the country.

HDB Financial Services Limited (HDBFSL) is a non-deposit taking non-banking finance company (‘NBFC’) offering wide range of loans and asset finance products to individuals, emerging businesses and micro enterprises. As on September 30, 2022, the Bank held 94.9% stake in HDBFSL.

For the quarter ended September 30, 2022, HDBFSL’s net revenue was at Rs 2,201.3 crore as against Rs 1,916.7 crore for the quarter ended September 30, 2021, a growth of 14.9%. Profit after tax for the quarter ended September 30, 2022 was Rs 471.4 crore compared to Rs 191.7 crore for the quarter ended September 30, 2021.

The total loan book was Rs 63,112 crore as on September 30, 2022. Stage 3 loans were at 4.88% of gross loans. As on September 30, 2022, total CAR was at 20.8% with Tier-I CAR at 16.0%.

As on September 30, 2022, HDBFSL had 1,407 branches across 1,009 cities / towns.

CONSOLIDATED FINANCIAL RESULTS

The consolidated net profit for the quarter ended September 30, 2022 was Rs 11,125 crore, up 22.3%, over the quarter ended September 30, 2021. Consolidated advances grew by 22.8% from Rs 1,249,331 crore as on September 30, 2021 to Rs 1,533,945 crore as on September 30, 2022.

The consolidated net profit for the half year ended September 30, 2022 was Rs 20,704 crore, up 21.7%, over the half year ended September 30, 2021.

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