HDFC Bank Results for the quarter ended September 30, 2021

HDFC Bank

The Board of Directors of HDFC Bank Limited approved the Bank’s (Indian GAAP) results for the quarter and half year ended September 30, 2021, at its meeting held in Mumbai on Saturday, October 16, 2021. 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, 2021

The Bank’s net revenues (net interest income plus other income) increased by 14.7% to ₹ 25,085.2 crores for the quarter ended September 30, 2021, from ₹ 21,868.8 crores for the quarter ended September 30, 2020.

Net interest income (interest earned less interest expended) for the quarter ended September 30, 2021 grew by 12.1% to ₹ 17,684.4 crores from ₹ 15,776.4 crores for the quarter ended September 30, 2020. Advances grew at 15.5% reaching new heights driven through relationship management, digital offering, and breadth of products. The core net interest margin was at 4.1%. New liability relationships added during the quarter were at an all-time high. This continued focus on deposits helped in the maintenance of a healthy liquidity coverage ratio at 123%, well above the regulatory requirement, which positions the Bank favorably to capitalize on the opportunities that would arise as the economy gains momentum during the festive months.

Other income (non-interest revenue) at ₹ 7,400.8 crores was 29.5% of net revenues for the quarter ended September 30, 2021, and grew by 21.5% over ₹ 6,092.5 crores in the corresponding quarter of the previous year. The four components of other income for the quarter ended September 30, 2021, were fees & commissions of ₹ 4,945.9 crores (₹ 3,940.3 crores in the corresponding quarter of the previous year), foreign exchange & derivatives revenue of ₹ 867.3 crores (₹ 560.4 crores in the corresponding quarter of the previous year), gain on sale/revaluation of investments of ₹ 675.5 crores (₹ 1,016.2 crores in the corresponding quarter of the previous year) and miscellaneous income, including recoveries and dividend, of ₹ 912.1 crores (₹ 575.6 crores in the corresponding quarter of the previous year).

We added 256 branches and 12,259 people over the last twelve months and made other investments to position ourselves and capitalize on the growth opportunity. Operating expenses for the quarter ended September 30, 2021, were ₹ 9,277.9 crores, an increase of 15.2% over ₹ 8,055.1 crores during the corresponding quarter of the previous year. The cost-to-income ratio for the quarter was at 37.0%.

Pre-provision Operating Profit (PPOP) at ₹ 15,807.3 crores grew by 14.4% over the corresponding quarter of the previous year.

Provisions and contingencies for the quarter ended September 30, 2021, were ₹ 3,924.7 crores (consisting of specific loan loss provisions of ₹ 2,286.4 crore and general and other provisions of ₹ 1,638.3 crores) as against ₹ 3,703.5 crores (consisting of specific loan loss provisions of ₹ 1,240.6 crore and general and other provisions of ₹ 2,462.9 crores) for the quarter ended September 30, 2020. Total provisions for the current quarter included contingent provisions of approximately ₹ 1,200 crores.

The total credit cost ratio was at 1.30%, as compared to 1.67% for the quarter ending June 30, 2021, and 1.41% for the quarter ending September 30, 2020.

Profit before tax (PBT) for the quarter ended September 30, 2021, at ₹ 11,882.6 crores grew by 17.5% over the corresponding quarter of the previous year. After providing ₹ 3,048.3 crores for taxation, the Bank earned a net profit of ₹ 8,834.3 crores, an increase of 17.6% over the quarter ended September 30, 2020.

Balance Sheet: As of September 30, 2021

The total balance sheet size as of September 30, 2021, was ₹ 1,844,845 crores as against ₹1,609,428 crores as of September 30, 2020, a growth of 14.6%.

Total deposits as of September 30, 2021, were ₹ 1,406,343 crores, an increase of 14.4% over September 30, 2020. CASA deposits grew by 28.7% with savings account deposits at ₹ 452,381 crore and current account deposits at ₹ 205,851 crores. Time deposits were at ₹ 748,111 crores, an increase of 4.2% over the corresponding quarter of the previous year, resulting in CASA deposits comprising 46.8% of total deposits as of September 30, 2021.

Total advances as of September 30, 2021, were ₹ 1,198,837 crores, an increase of 15.5% over September 30, 2020. Retail loans grew by 12.9%, commercial and rural banking loans grew by 27.6% and other wholesale loans grew by 6.0%. Overseas advances constituted 3.5% of total advances.

Half Year ended September 30, 2021

For the half-year ended September 30, 2021, the Bank earned a total income of ₹ 75,525.6 crores as against ₹ 70,522.7 crores in the corresponding period of the previous year. Net revenues (net interest income plus other income) for the half-year ended September 30, 2021, were ₹ 48,382.6 crores, as against ₹ 41,609.6 crores for the half-year ended September 30, 2020. Net profit for the half-year ended September 30, 2021, was ₹ 16,564.0 crores, up by 16.9% over the corresponding half-year ended September 30, 2020.

Capital Adequacy:

The Bank’s total Capital Adequacy Ratio (CAR) as per Basel III guidelines was at 20.0% as on September 30, 2021 (19.1% as on September 30, 2020) 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 18.7% as of September 30, 2021 compared to 17.7% as of September 30, 2020. Common Equity Tier 1 Capital ratio was at 17.4% as of September 30, 2021. Risk-weighted Assets were at ₹ 1,190,270 crore (as against ₹ 1,037,483 crore as at September 30, 2020).

Network

As of September 30, 2021, the Bank’s distribution network was at 5,686 branches and 16,642 ATMs / Cash Deposit & Withdrawal Machines (CDMs) across 2,929 cities / towns as against 5,430 branches and 15,292 ATMs / CDMs across 2,848 cities / towns as of September 30, 2020. 50% of our branches are in semi-urban and rural areas. In addition, we have 15,946 business correspondents, which are primarily manned by Common Service Centres (CSC) as against 12,141 business correspondents as of September 30, 2020. The number of employees were at 129,341 as of September 30, 2021 (as against 117,082 as of September 30, 2020).

Asset Quality

Gross non-performing assets were at 1.35% of gross advances as of September 30, 2021, (1.2% excluding NPAs in the agricultural segment) as against 1.47% as of June 30, 2021 (1.3% excluding NPAs in the agricultural segment) and 1.37% (proforma approach) as on September 30, 2020 (1.2% excluding NPAs in the agricultural segment). Net non-performing assets were at 0.40% of net advances as of September 30, 2021.

The Bank held floating provisions of ₹ 1,451 crore and contingent provisions of ₹ 7,756 crores as of September 30, 2021. Total provisions (comprising specific, floating, contingent, and general provisions) were 163% of the gross non-performing loans as of September 30, 2021.

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 of September 30, 2021, the Bank held a 96.2% stake in HSL. For the quarter ended September 30, 2021, HSL’s total income grew by 42% to ₹ 489.5 crores, as against ₹ 344.3 crores for the quarter ended September 30, 2020. Profit after tax for the quarter grew by 44% to ₹ 239.6 crores, as against ₹ 165.8 crores for the quarter ended September 30, 2020.

As of September 30, 2021, HSL had 213 branches across 147 cities/towns in the country.

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 September 30, 2021, the Bank held a 95.1% stake in HDBFSL.

The total loan book was ₹ 60,008 crore as of September 30, 2021, as against ₹ 59,744 crores as of September 30, 2020. The liquidity coverage ratio was healthy at 157%.

For the quarter ended September 30, 2021, HDBFSL’s net revenue was at ₹ 1,916.7 crores as against ₹ 1,703.7 crores for the quarter ended September 30, 2020, a growth of 12.5%. Pre-provision Operating Profit (PPOP) was ₹ 885.9 crore as against ₹ 816.0 crores for the quarter ended September 30, 2020, a growth of 8.6%.

Provisions and contingencies for the quarter were at ₹ 633.9 crores (including ₹ 125.0 crores of conservative management overlay) as against ₹ 929.8 crores for the quarter ended September 30, 2020, and ₹ 869.6 crores (including ₹ 200.0 crores of conservative management overlay) in the prior quarter.

Profit after tax for the quarter ended September 30, 2021, was ₹ 191.7 crore compared to a loss of ₹ 85.0 crores for the quarter ended September 30, 2020, and a profit after tax of ₹ 88.6 cr for the quarter ended June 30, 2021.

As of September 30, 2021, gross Stage 3 stood at 6.1%, a reduction of over 200 bps in the quarter.

Total CAR was at 19.8% with Tier-I CAR at 14.3% as of September 30, 2021.

As on September 30, 2021, HDBFSL had 1,336 branches across 956 cities / towns.

Consolidated Financial Results

The consolidated net profit for the quarter ended September 30, 2021, was ₹ 9,096 crore, up 18.1%, over the quarter ended September 30, 2020. Consolidated advances grew by 14.7% from ₹ 1,088,948 crore as on September 30, 2020 to ₹ 1,249,331 crore as on September 30, 2021.

The consolidated net profit for the half-year ended September 30, 2021, was ₹ 17,018 crore, up 16.3%, over the half year ended September 30, 2020.

Note:

₹ = Indian Rupees

1 crore = 10 million

All figures and ratios are in accordance with Indian GAAP unless otherwise specified.

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