HDFC Bank slides over 1% despite 18% rise in Q3 profit

HDFC Bank shares tanked over 1% to Rs 1524.00 on BSE at 9:50 am despite reporting strong Q3 results.

The bank reported a standalone net profit of Rs 10,342 crore for the December 2021 quarter on January 15, up 18% year on year, owing to a decrease in bad loan provisions.

The profit in the previous fiscal’s equivalent quarter was Rs 8,758.29 crore.

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Net interest income increased 13% to Rs 18,444 crore in Q3FY22, with a net interest margin of 4.1% for the quarter and 16.4% credit growth.

Profit and net interest income increased by 17% and 4.3%, respectively, in Q3.

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On January 4, HDFC Bank said that advances for the quarter were Rs 12.6 lakh crore, a 16.4% increase over the previous year, and a 5.1% increase sequentially. 

“Retail loan growth was 13.5% YoY (up 4.5% QoQ) and corporate loan book growth at 7.5% YoY (up 4.5% QoQ). It registered 13.8% YoY growth (up 2.8% QoQ) in deposits at Rs 14.46 lakh crore with CASA deposits rising 24.6% YoY (up 3.5% QoQ) to Rs 6.81 lakh crore in December 2021 quarter. CASA ratio stood at around 47% as of December 31, 2021, as compared to 43% as of December 2020 and 46.8% as of September 2021”, the bank said.

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“Provisions and contingencies for the quarter at Rs 2,994 crore declined 12.3% year-on-year and dropped 23.7% over the previous quarter, which comprised a specific loan loss provisions of Rs 1,820.6 crore, and general and other provisions of Rs 1,173.4 crore. Total provisions for the December quarter included contingent provisions of approximately Rs 900 crore,” HDFC Bank further added.

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Asset quality improved significantly as gross non-performing assets (GNPAs) as a percentage of gross advances reduced 9 bps sequentially to 1.26% and net NPAs declined 3 bps QoQ to 0.37% at the end of December 2021.

As of December 2021, the bank has floating provisions of Rs 1,451 crore and contingent provisions of Rs 8,636 crore.

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For the December 2021 quarter, pre-provision operating profit rose by 10.5% year on year to Rs 16,776 crore, while other income (non-interest income) rose by 9.94% to Rs 8,183.55 crore.

Other income increased due to increases in forex and derivatives revenue, as well as recoveries and dividends, while fees and commissions, which account for 62% of non-interest income, increased somewhat year on year.