HDFC Bank, India’s most valuable bank in terms of market cap, reported 3.95% growth yoy in revenues in the Dec-20 quarter at Rs39,839cr. Even as wholesale banking revenues dwindled on yoy basis, growth was visible in revenues from retail banking and treasury.
For the Dec-20 quarter, the operating profits were up 17.55% at Rs16,136cr. This growth was largely on the back of the interest outgo which fell by nearly 10% yoy due to sharply lower cost of funds. As a result, the operating margin or OPM crossed the psychological 40% mark in Dec-20; a growth of nearly 470 basis points in operating margins on a yoy basis.
Profit after tax (PAT) for the Dec-20 quarter came in much better than street expectations. It was up 14.36% at Rs8,760cr. Provisions were higher on yoy basis but lower on sequential basis. PAT margins expanded by 200 basis points to 21.99% in Dec-20 quarter.
Financial highlights for Dec-20 compared yoy and sequentially
|
HDFC Bank |
|||||
|
Rs in Crore |
Dec-20 |
Dec-19 |
YOY |
Sep-20 |
QOQ |
|
Total Income (Rs cr) |
₹ 39,839 |
₹ 38,326 |
3.95% |
₹ 38,438 |
3.64% |
|
Operating Profit (Rs cr) |
₹ 16,136 |
₹ 13,727 |
17.55% |
₹ 14,798 |
9.04% |
|
Net Profit (Rs cr) |
₹ 8,760 |
₹ 7,660 |
14.36% |
₹ 7,703 |
13.73% |
|
Diluted EPS (Rs.) |
₹ 15.80 |
₹ 13.90 |
₹ 14.00 |
||
|
Operating Margins |
40.50% |
35.82% |
38.50% |
||
|
Net Margins |
21.99% |
19.99% |
20.04% |
||
|
Gross NPA Ratio |
0.81% |
1.42% |
1.08% |
||
|
Net NPA Ratio |
0.09% |
0.48% |
0.17% |
||
|
Return on Assets |
0.55% |
0.55% |
0.48% |
||
|
Capital Adequacy |
18.90% |
18.50% |
19.10% |
Key takeaways from the Dec-20 quarter results
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HDFC Bank has scored really well on most asset quality parameters. For example, the gross NPAs fell sharply from 1.42% in Dec-19 to 0.81% in Dec-20 quarter. Similarly, the net NPAs at just 0.09% hint at most of the medium terms risks in asset quality almost entirely provided for. Capital adequacy has also remained comfortable.
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Net interest income or NII for the Dec-20 quarter was up 15.1% on a yoy basis. While the growth in advances stood at 15.6% for the Dec-20 quarter, the core net interest margin or NIM has got a prop to 4.2% in the Dec-20 quarter on lower cost of funds.
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The provisions for losses and contingencies in the Dec-20 quarter at Rs3,414cr included a specific loan loss provision of Rs691cr. Total deposits grew by 19.1% in the Dec-20 quarter with CASA deposits growing 29.6%. The share of CASA in the overall deposit mix now stands at 43%.
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