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Hdfc Bank Q4fy22: Net profit up 23% YoY, asset quality further improves

HDFC Bank made a net profit of 10,055.2 crore on a stand-alone basis for the quarter ending March 2022 (Q4FY22), up 22.8% year-on-year. The bank had recorded a net profit of 8,186.51 crores in the March quarter of last year, when the net profit was 10,342.20 crores in the third quarter of FY22.

Profitability was driven by healthy interest income, lower provisions and improving asset quality. In addition, other income recorded strong growth, which further improved the performance.

The bank’s net interest income, which is the difference between interest earned and interest spent, is 18,872.7 crores in the quarter under review, up 10.2% from 17,120.2 crores for the same quarter last year. During the December 2021 quarter, the bank reported interest income of 17,543.48 crores.

Core net interest margin was 4% on total assets, compared to 4.2% on an interest earning assets basis for Q4FY22.

During Q4FY22, the lender recorded provisions and contingencies 3,312.4 crores for the quarter against total provisions of 4,693.7 crores for the same quarter a year ago. In Q4FY22, total provisions consisted of specific loan loss provisions of 1,788.2 crore, and the general and other provisions of 1,534.2 crore.

In terms of asset quality, gross non-performing assets as a percentage were 1.17% versus 1.32% in Q4FY21 and 1.26% in Q3FY22. Net NPA also improved to 0.32% last quarter from 0.40% and 0.37% in Q4FY21 and Q3FY22 respectively.

Other income during Q4FY22 increased by 28.8% of net income to reach 7,637.1 crore against 7,593.9 crores in the corresponding period of the previous year.

During the quarter, advances from HDFC Bank grew 20.8%, with growth across products and segments.

“We continued to add new accountability relationships at a steady pace of 2.4 million during the quarter,” HDFC Bank said in its audit report. The short-term liquidity ratio is healthy at 112% and well above the regulatory requirement.

The lender’s total cost of credit was 0.96% compared to 0.94% for the quarter ending in December 2021, and 1.6% for the quarter ending in March 2021.

On Monday, HDFC Bank shares will take center stage following their Q4FY22 and year-end financial performance. Currently, on the BSE, stocks have settled at 1464.85 each down 1.9%.

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