The Board of Directors of HDFC Bank Limited approved the Bank’s (Indian GAAP)results for the quarter ended June 30, 2020, at their meeting held in Mumbai on Saturday, July 18, 2020. The accounts have been subjected to a ‘Limited Review’ by the statutory auditors of the Bank.
STANDALONE FINANCIAL RESULTS:
Profit & Loss Account: Quarter ended June 30, 2020, The Bank’s net revenues (net interest income plus other income) grew to ₹ 19,740.7 crores for the quarter ended June 30, 2020, from ₹ 18,264.5 for the quarter ended June 30, 2019.
Net interest income (interest earned less interest expended) for the quarter ended June 30, 2020, grew by 17.8% to ₹ 15,665.4 crores from ₹ 13,294.3 crores for the quarter ended June 30, 2019, driven by growth in advances of 20.9%, and growth in deposits of 24.6%. The net interest margin for the quarter was 4.3%.
Other income (non-interest revenue) at ₹ 4,075.3 crores was 20.6% of the net revenues for the quarter ended June 30, 2020, as against ₹ 4,970.3 crores in the corresponding quarter ended June 30, 2019. The four components of other income for the quarter ended June 30, 2020, were fees & commissions of ₹ 2,230.7 crores (₹ 3,551.6 crores in the corresponding quarter of the previous year), foreign exchange & derivatives revenue of ₹ 436.6 crores (₹ 576.7 crores for the corresponding quarter of the previous
year), gain on sale/revaluation of investments of ₹ 1,086.7 crores (gain of ₹ 212.0 crores in the corresponding quarter of the previous year) and miscellaneous income, including recoveries and dividend, of ₹ 321.3 crores (₹ 630.0 crores for the corresponding quarter of the previous year).
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/other income was lower by approximately ₹ 2,000 crores. Operating expenses for the quarter ended June 30, 2020, were ₹ 6,911.5 crore, a decrease of 2.9% over ₹ 7,117.3 crore during the corresponding quarter of the previous year. The cost-to-income ratio for the quarter was at 35.0% as against 39.0% for the corresponding quarter ended June 30, 2019. Operating expenses were lower primarily due to lower loan origination and sales volumes.
Pre-provision Operating Profit (PPOP) at ₹ 12,829.3 crores grew by 15.1% over the
a corresponding quarter of the previous year.
Provisions and contingencies for the quarter ended June 30, 2020, were ₹ 3,891.5 crores (consisting of specific loan loss provisions of ₹ 2,739.8 crore and general provisions and other provisions of ₹ 1,151.7 crores) as against ₹ 2,613.7 crores (consisting of specific loan loss provisions of ₹ 2,248.0 crore and general provisions and other provisions of ₹ 365.7 crores) for the quarter ended June 30, 2019. Total provisions for the current quarter included contingent provisions of approximately ₹ 1,000 crores. The Core Credit Cost ratio was 1.08%, as compared to 0.77% in the quarter ending March 31, 2020, and 1.07% in the quarter ending June 30, 2019.
Profit before tax (PBT) for the quarter ended June 30, 2020, was at ₹ 8,937.8 crores. After providing ₹ 2,279.1 crores for taxation, the Bank earned a net profit of ₹ 6,658.6 crores, an increase of 19.6% over the quarter ended June 30, 2019.
Balance Sheet: As of June 30, 2020
Total balance sheet size as of June 30, 2020, was ₹ 1,545,103 crores as against ₹1,265,253 crores as of June 30, 2019, a growth of 22.1%.
Total deposits as of June 30, 2020, were ₹ 1,189,387 crores, an increase of 24.6% over June 30, 2019. CASA deposits grew by 26.0% with savings account deposits at ₹ 327,358 crore and current account deposits at ₹ 150,077 crores. Time deposits were at ₹ 711,952 crores, an increase of 23.7% over the previous year, resulting in CASA deposits comprising 40.1% of total deposits as of June 30, 2020. The Bank’s continued focus on deposits helped in the maintenance of a healthy liquidity coverage ratio at
140%, well above the regulatory requirement.
Total advances as of June 30, 2020, were ₹ 1,003,299 crores, an increase of 20.9% over June 30, 2019. Domestic advances grew by 21.0% over June 30, 2019. As per regulatory [Basel 2] segment classification, domestic retail loans grew by 7.2% and domestic wholesale loans grew by 37.6%. The domestic loan mix as per Basel 2 classification between retail: wholesale was 48:52. Overseas advances constituted 3% of total advances.
Capital Adequacy:
The Bank’s total Capital Adequacy Ratio (CAR) as per Basel III guidelines was at 18.9% as on June 30, 2020 (16.9% as on June 30, 2019) as against a regulatory requirement of 11.075% which includes Capital Conservation Buffer of 1.875%, and an additional requirement of 0.20% on account of the Bank being identified as a Domestic Systemically Important Bank (D-SIB). Tier 1 CAR was at 17.5% as of June 30, 2020, compared to 15.6% as of June 30, 2019. Common Equity Tier 1 Capital ratio was at 16.7% as of June 30, 2020. Risk-weighted Assets were at ₹ 1,010,774 crores (as against ₹ 965,635 crores as of June 30, 2019).
NETWORK
As of June 30, 2020, the Bank’s distribution network was at 5,326 branches and 14,996 ATMs / Cash Deposit & Withdrawal Machines (CDMs) across 2,825 cities / towns as against 4,990 branches and 13,727 ATMs / CDMs across 2,764 cities / towns as of June 30, 2019. 50% of our branches are in semi-urban and rural areas. In addition, we have 6,546 business correspondents, of which 97% are manned by Common Service Centres (CSC) as against 140 outlets manned by non-CSC business correspondents as of June 30, 2019. The number of employees was at 115,822 as of June 30, 2020 (as against 104,154 as of June 30, 2019).
ASSET QUALITY
Gross non-performing assets were at 1.36% of gross advances as on June 30, 2020, (1.2% excluding NPAs in the agricultural segment) as against 1.26% as on March 31, 2020 (1.1% excluding NPAs in the agricultural segment) and 1.40% as on June 30, 2019 (1.2% excluding NPAs in the agricultural segment). Net non-performing assets were at 0.33% of net advances as of June 30, 2020.
During the quarter, the Bank has used its analytical models to determine slippage, 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, 2020, 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. The Bank held floating provisions of ₹ 1,451 crore and contingent provisions of ₹ 4,002 crores as on June 30, 2020. Total provisions (comprising specific, floating, contingent, and general provisions) were 149% of the gross non-performing loans as of June 30, 2020.
CONSOLIDATED FINANCIAL RESULTS
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.
HDFC Securities Limited (HSL) is amongst the leading retail broking firms in India. As
on June 30, 2020, the Bank held a 96.5% stake in HSL.
HDB Financial Services Limited (HDBFSL) is a non-deposit taking non-banking finance company (‘NBFC’) offering a wide range of loans and asset finance products to individuals, emerging businesses and micro-enterprises. As of June 30, 2020, the Bank held a 95.3% stake in HDBFSL.
The consolidated net profit for the quarter ended June 30, 2020, was ₹ 6,927 crores, up 22.0%, over the quarter ended June 30, 2019. Consolidated advances grew by 19.6% from ₹ 880,939 crores as on June 30, 2019, to ₹ 1,053,683 crores as on June 30, 2020.
Sd/-
Srinivasan Vaidynathan
Chief Financial Officer
Note:
₹ = Indian Rupees
1 crore = 10 million
All figures and ratios are in accordance with Indian GAAP unless otherwise specified.
