/HDFC Bank Q1 results: Profit rises 20% YoY to Rs 6,659 crore; provisions jump 49%

HDFC Bank Q1 results: Profit rises 20% YoY to Rs 6,659 crore; provisions jump 49%

Private lender HDFC Bank on Saturday posted a 19.58 per cent year-on-year rise in net profit at Rs 6,658.62 crore for the quarter ended June 30. The figure stood at Rs 5,568.16 crore in the corresponding quarter last year.

Net interest income of the lender grew 17.80 per cent YoY to Rs 15,665.40 crore in Q1FY21, driven by growth in advances of 20.9 per cent, and a growth in deposits of 24.6 per cent.

Provision and contingencies increased 48.89 per cent YoY and 2.82 per cent QoQ to Rs 3,891.52 crore during the quarter under review. Total provisions for the quarter included contingent provisions of around Rs 1,000 crore.

HDFC Bank Figures in Rs % change (YoY)
Net Profit 6,658.62 crore + 19.58
Net Interest Income 15,665.40 crore + 17.80
Provisions & Contengencies 3,891.52 crore + 48.89

Pre-provision operating profit (PPOP) grew 15.10 per cent YoY to Rs 12,829.30 crore.

Asset quality of the lender deteriorated marginally as percentage of gross non-performing assets (NPA) stood at 1.36 per cent in Q1FY21 against 1.26 per cent in Q4FY20.

“The continued slowdown in economic activity has led to a decrease in retail loan origination, sale of third party products, use of credit and debit cards by customers, efficiency in collection efforts and waivers of certain fees. As a result, fees or other income were lower by approximately Rs 2,000 crore,” HDFC Bank said.

Operating expenses declined 2.90 per cent YoY to Rs 7,117.30 crore due to lower loan origination and sales volumes. The cost-to-income ratio for the quarter stood at 35 per cent as against 39 per cent for the corresponding quarter ended June 30, 2019.

HDFC Bank further added that it used its analytical models to determine slippages, resulting in a more expedited recognition of NPAs, as well as accelerated corresponding specific provisions.

The bank also continues to hold provisions as on June 30 against the potential impact of Covid-19 based on the information available at this point in time and the same are in excess of the RBI prescribed norms, it said.

The bank held floating provisions of Rs 1,451 crore and contingent provisions of Rs 4,002 crore for the quarter ended June 30.

Total provisions (comprising specific, floating, contingent and general provisions) were 149 per cent of the gross non-performing loans.

Earlier, shares of HDFC Bank on Friday settled 3.46 per cent higher at Rs 1,099.15 ahead of quarterly results. On the other hand, the benchmark BSE Sensex settled 1.50 per cent up at 37,020.

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