HDFC Bank’s Q1FY20 result Highlights: From total income, revenues, asset quality to dividend - All you need to know

The largest private lender HDFC Bank has bagged a net profit of Rs 5,568.2 crore during June 2019 (Q1FY20) quarter, which rose by a whopping 21% over the quarter ended June 30, 2018. The net profit was determined after providing Rs 2,965.4 crore for taxation. Also, the net interest income (NII) grew by 22.9% to Rs 13,294.3 crore in Q1, compared to Rs 10,813.6 crore for the quarter ended June 30, 2018. While, core net interest margin (NIM) stood at 4.3%. 

Here’s a list of 10 key highlights from the result: 

Total income, revenues

Total income for the quarter ended June 30, 2019 at Rs 32,361.8 crore grew by 22.7% from Rs 26,367.0 crore for the quarter ended June 30, 2018. Net revenues (net interest income plus other income) increased by 24.8% to Rs  18,264.5 crore for the quarter ended June 30, 2019 from Rs 14,631.6 crore in the corresponding quarter of the previous year.

Other income

Other income (non-interest revenue) at Rs  4,970.3 crore was 27.2% of the net revenues for the quarter ended June 30, 2019 and grew by 30.2% over Rs  3,818.1 crore in the corresponding quarter ended June 30, 2018. 

Four components of other income for the quarter ended June 30, 2019 were fees & commissions of Rs 3,551.6 crore (Rs 3,171.0 crore in the corresponding quarter of the previous year), foreign exchange & derivatives revenue of Rs  576.7 crore (Rs 499.6 crore for the corresponding quarter of the previous year), gain on revaluation / sale of investments of Rs 212.0 crore (loss of Rs 283.2 crore in the corresponding quarter of the previous year) and miscellaneous income, including recoveries and dividend, of Rs 630.0 crore (Rs 430.7 crore for the corresponding quarter of the previous year). 

Operating expenses

Operating expenses for the quarter ended June 30, 2019 were Rs  7,117.3 crore, an increase of 18.9% over Rs 5,983.9 crore during the corresponding quarter of the previous year. The core cost-to-income ratio for the quarter was at 39.4% as against 40.1% for the corresponding quarter ended June 30, 2018. 

Provisions

Provisions and contingencies for the quarter ended June 30, 2019 were Rs 2,613.7 crore as against Rs 1,629.4 crore for the quarter ended June 30, 2018. The key components therein for the quarter ended June 30, 2019 were specific loan loss and contingent provisions of Rs 2,413.5 crore (as against Rs 1,432.2 crore for the corresponding quarter of the previous year) and general provisions Rs 200.2 crore (as against Rs 183.2 crore for the corresponding quarter of the previous year). General provisions include additional provisions of Rs 85.9 crore for standard advances to the NBFC / HFC sector

Deposits

Total deposits as of June 30, 2019 were Rs 954,554 crore, an increase of 18.5% over June 30, 2018. CASA deposits grew by 12.8% with savings account deposits at Rs 253,338 crore and current account deposits at Rs 125,663 crore. 

Time deposits were at Rs 575,553 crore, an increase of 22.5% over the previous year, resulting in CASA deposits comprising 39.7% of total deposits as of June 30, 2019. The Bank’s continued focus on deposits helped in the maintenance of a healthy liquidity coverage ratio at 126%, well above the regulatory requirement.

Advances

Total advances as of June 30, 2019 were Rs 829,730 crore, an increase of 17.1% over June 30, 2018. Advances to the vehicle loan segment, where sales volumes have seen some moderation, grew at 8.3% over the previous year. Domestic advances grew by 17.9% over June 30, 2018. 

As per regulatory [Basel 2] segment classification, domestic retail loans grew by 16.5% and domestic wholesale loans grew by 19.6%. The domestic loan mix as per Basel 2 classification between retail:wholesale was 54:46. Overseas advances constituted 3% of total advances.

Capital Adequacy

Bank’s total Capital Adequacy Ratio (CAR) as per Basel III guidelines was at 16.9% as on June 30, 2019 (14.6% as on June 30, 2018) 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 15.6% as of June 30, 2019 compared to 13.1% as of June 30, 2018. Common Equity Tier 1 Capital ratio was at 14.8% as of June 30, 2019. Risk-weighted Assets were at Rs 965,635 crore (as against Rs  844,894 crore as at June 30, 2018).

Dividend

The Board of Directors has declared a special interim dividend of Rs 5 per equity share of Rs 2 to commemorate 25 years of the Bank’s operations.
Asset quality

The Bank held floating provisions of Rs 1,451 crore as on June 30, 2019. Total provisions (comprising specific provisions, general provisions and floating provisions) were 115% of the gross non-performing loans as on June 30, 2019. 

That said, the gross NPA were at 1.40% of gross advances as on June 30, 2019 (1.17% excluding NPAs in the agricultural segment) as against 1.33% as on June 30, 2018 (1.09% excluding NPAs in the agricultural segment). Net non-performing assets were at 0.4% of net advances as on June 30, 2019.

Consolidated results

The Bank’s consolidated financial results include the financial results of its subsidiary companies based on the recognition and measurement principles as per Indian GAAP. 

The consolidated net profit for the quarter ended June 30, 2019 was Rs 5,676 crore, up 18.0%, over the quarter ended June 30, 2018. Consolidated advances grew by 17.2% from Rs 751,386 crore as on June 30, 2018 to Rs  880,939 crore as on June 30, 2019.