HDFC Bank on Saturday reported a 16 per cent rise in its consolidated net profit to Rs 7,703 crore for the second quarter ended on September 30, 2020.
The private sector lender had posted a consolidated net profit of Rs 6,638 crore in the corresponding quarter a year ago.
Total consolidated income during the quarter under review rose to Rs 38,438.47 crore from Rs 36,130.96 crore in July-September 2019, the bank said in a release.
Consolidated advances grew by 14.9 per cent to Rs 10.89 lakh crore at the end of September 2020 from Rs 9.47 lakh crore a year earlier, HDFC Bank said.
On standalone basis, HDFC Bank said after providing Rs 2,597.2 crore for taxation, it earned a net profit of Rs 7,513.1 crore, an increase of 18.4 per cent over the quarter ended September 30, 2019.
Total income (standalone) grew to Rs 36,069.42 crore in the second quarter of FY2021 from Rs 33,755 crore in the year ago quarter.
"While the previous quarter largely bore the burnt of the COVID-19 pandemic, some of the softness continued into the current quarter leading to lower retail loan origination, use of debit and credit cards by customers, efficiency in collection efforts and waivers of certain fees. As a result, fees/other income were lower by approximately Rs 800 crore.
"However, the loan and card momentum has improved over the previous quarter, thereby reducing the gap to less than half," it added.
On asset front, gross non-performing assets (NPAs) of the bank fell to 1.08 per cent of the gross advances as on September 30, 2020, as against 1.38 per cent a year earlier.
In absolute value, gross NPAs or bad loans reduced to Rs 11,304.60 crore from Rs 12,508.15 crore. Net NPAs came down to 0.17 per cent (Rs 1,756.08 crore) from 0.42 per cent (Rs 3,790.95 crore).
However, its provisioning for bad loans and contingencies rose to Rs 3,703.50 crore for the second quarter of FY2021 as against Rs 2,700.68 crore during the year-ago period.
The country's largest private sector lender said that the continued focus on deposits helped in the maintenance of a healthy liquidity coverage ratio at 153 per cent, well above the regulatory requirement.
On standalone basis, bank's total deposits were Rs 12.29 lakh crore, an increase of 20.3 per cent over September 2019, it said. Advances were up by 15.8 per cent at Rs 10.38 lakh crore.
Meanwhile, the lender informed that its board of directors at the meeting held on Saturday approved appointment of Sashidhar Jagdishan as an additional director and also managing director and chief executive officer of the bank.
His appointment is subject to the approval of the shareholders of the bank. Jagdishan's appointment will be for a period of three years starting October 27, 2020, as approved by the Reserve Bank of India vide its email dated August 3, 2020, it said.
The incumbent Aditya Puri retires on October 26, after heading the bank as its Managing Director since September 1994.
Citing the Supreme Court order of September 3 with regard to accounts that were not declared NPA till August 31, HDFC Bank said it has held floating provisions of Rs 1,451 crore and contingent provisions of Rs 6,304 crore as on September 30, 2020.
Total provisions (comprising specific, floating, contingent and general provisions) were 195 per cent of the reported gross NPAs or 154 per cent of proforma gross NPAs as on September 30, 2020, it said.
The lender has two subsidiaries-- HDFC Securities Ltd (HSL) which is a retail broking firm and HDB Financial Services Ltd, which is a non-deposit taking non-banking finance company.
Among others, it said that while there has been some improvement in economic activities during the current quarter as lockdown restrictions have eased due to the pandemic, the continued slowdown has led to decrease in loan originations, sale of third party products, use to credit and debit cards by customers and efficiency in collection efforts.
"The slowdown may lead to a rise in the number of customer defaults and consequently an increase in provisions there against," it added.
