The last 2 years have been tumultuous for the Indian economy. We have seen massive ups and downs in the way business is being done. One of the major sectors to soar high during these days is undoubtedly the IT sector. But it’s not the only one. Along with the IT sector, the banking sector has also minting huge profits in the last two years. Recent quarterly announcements by HDFC Bank are also directing in the same direction.
HDFC clocks an 18% increase in Y-O-Y profits
Recently, HDFC Bank announced a standalone net profit of Rs 10,342 crore for the December 2021 quarter. This is an 18 percent year-on-year increase in the bank’s profits. The profit in the corresponding quarter last fiscal was at Rs 8,758.29 crore. The stellar results are backed by a decline in bad loan provisions.
Notably, net interest income, the difference between interest earned and interest expended, climbed 13 percent to Rs 18,444 crore in Q3FY22, with a net interest margin of 4.1 percent for the quarter, and healthy credit growth of 16.4 percent. Profit and net interest income grew by 17 percent and 4.3 percent on a sequential basis in Q3.
HDFC Bank announced that advances for the quarter at Rs 12.6 lakh crore grew by 16.4 percent compared to the year-ago period and the sequential growth was 5.1 percent. At the same time, the bank experienced retail loan growth of 13.5 percent YoY and corporate loan book growth at 7.5 percent YoY
The bank also said that the total credit cost ratio was at 0.94 percent for the quarter. This was against 1.3 percent reported for September 2021 quarter and 1.25 percent for December 2020 quarter.
Along with declining bad loans other sources also contributed to profits
It should be noted that the growth in other income was driven by forex & derivatives revenue, and recoveries & dividend, while fees & commissions, saw moderate growth YoY.
“Fees & commissions income at Rs 5,075.1 crore for the quarter grew by 2 percent, foreign exchange & derivatives revenue at Rs 949.5 crore increased by 68.8 percent, and miscellaneous income including recoveries & dividend at Rs 1,112.5 crore rose by 39.56 crores,” the company had declared in its BSE filing.
This announcement had a direct effect on the share market. HDFC Bank’s share price settled higher at Rs 1,545.25 on the BSE, up 1.11 percent on Friday. The stock has fallen more than 3 percent since the beginning of the December 2021 quarter. The benchmark index Bank Nifty and Nifty50 have gained 2.5 percent and 3.6 percent, respectively in the same period.
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