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HDFC Bank Q2 consolidated profit up 18% at Rs 9,096 cr; gross NPA rises to 1.35%

Gross NPAs increased to Rs 16,346 crore from Rs 11,304 crore

HDFC BANK-CEO/

HDFC Bank on Saturday reported an 18 per cent increase in its consolidated net profit at Rs 9,096 crore for the second quarter ended September 2021, even as there is a marginal increase in bad loans.

The country's biggest private sector lender had posted a consolidated net profit of Rs 7,703 crore in the corresponding quarter a year ago.

Total consolidated income during the quarter under review rose to Rs 41,436.36 crore from Rs 38,438.47 crore in July-September 2020, HDFC Bank said in a statement.

Consolidated advances grew by 14.7 per cent from Rs 10,88,948 crore as on September 30, 2020 to Rs 12,49,331 crore as on September 30, 2021.

On a standalone basis, after providing Rs 3,048.3 crore for taxation, it earned a net profit of Rs 8,834.3 crore, an increase of 17.6 per cent over the quarter ended September 30, 2020.

The bank had earned a net profit Rs 7,513.1 crore on a standalone basis in the same quarter a year ago.

Total income (standalone) grew to Rs 38,754.16 crore in the second quarter of FY2022 from Rs 36,069.42 crore in the year-ago quarter.

Net interest income (interest earned less interest expended) for the quarter ended September 2021 grew by 12.1 per cent to Rs 17,684.4 crore from Rs 15,776.4 crore in the corresponding quarter last year.

Profit before tax (PBT) for the quarter ended September 30, 2021 at Rs 11,882.6 crore grew by 17.5 per cent over corresponding quarter of the previous year.

On asset front, there is a slight deterioration with gross non-performing assets (NPAs) of the bank rising to 1.35 per cent of the gross advances as on September 30, 2021, as against 1.08 per cent at the end of the same quarter a year earlier.

In absolute value, gross NPAs or bad loans increased to Rs 16,346.07 crore from Rs 11,304.60 crore at the end of the corresponding period of the last financial year due to the impact of the pandemic.

Similarly, net NPAs rose to 0.40 per cent (Rs 4,755.09 crore) from 0.17 per cent (Rs 1,756.08 crore) at the end of September 30, 2020.

As a result, provisioning for bad loans and contingencies rose to Rs 3,924.66 crore for the second quarter of FY2022 as against Rs 3,703.50 crore during the year-ago period.

Talking about COVID-19 impact on the business, the statement said, pandemic fear as well as restrictions on business and individual activities led to significant volatility in global and Indian financial markets and a significant decrease in global and local economic activities.

The disruptions following the outbreak have impacted loan originations, the sale of third-party products, the use of credit and debit cards by customers and the efficiency in collection efforts resulting in increase in customer defaults and consequent increase in provisions there against, it said.

"The extent to which the COVID-19 pandemic will continue to impact the bank's results will depend on ongoing as well as future developments, which are uncertain, including, among other things, any new information concerning the severity of the COVID-19 pandemic, and any action to contain its spread or mitigate its impact whether government-mandated or elected by us," it said.

On the Capital Adequacy Ratio (CAR), the statement said, it was at 20 per cent as on September 30, 2021 as compared to 19.1 per cent at the end of September 30 last year.

The regulatory requirement is 11.075 per cent which includes a Capital Conservation Buffer of 1.875 per cent, and an additional requirement of 0.20 per cent on account of the bank being identified as a Domestic Systemically Important Bank (D-SIB).

During the quarter ended September 30, 2021, the bank raised Basel III compliant Additional Tier 1 (AT1) Notes of USD 1 billion (about Rs 7,423.75 crore) and Basel III compliant AT1 Bonds of Rs 739 crore.

With regard to its subsidiaries, the bank said, HDB Financial Services Limited (HDBFSL), a non-deposit taking non-banking finance company (NBFC), earned a profit of Rs 191.7 crore compared to a loss of Rs 85 crore for the quarter ended September 30, 2020.

HDFC Securities Limited (HSL) reported a 44 per cent increase in profit after tax at Rs 239.6 crore, as against Rs 165.8 crore for the quarter ended September 30, 2020, helped by buoyant market conditions.

For the half-year ended September 30, 2021, the bank posted a 17 per cent increase in net profit at Rs 16,564 crore as against Rs 14,172 crore in the same period previous year.

The bank earned a total income of Rs 75,525.6 crore as against Rs 70,522.7 crore in the corresponding period of the previous year. 

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