HDFC Bank Q1 profit surges 30% to ₹11,952 cr; NII up 21%

Following the merger with its parent Housing Development Finance Corporation (HDFC), India's largest private bank HDFC Bank announced a 30% year-on-year (YoY) growth in profit for the April-June quarter of 2023-24 at ₹11,952 crore. The bank's revenue surged 26.9% YoY to ₹32,829 crore from ₹25,870 crore in the year-ago period, the bank says in a stock exchange filing.

The net interest income of the merged entity for the quarter ended June 30, 2023, surged 21.1% to ₹23,599 crore from ₹19,481 crore in the year-ago period.

HDFC Bank says its core net interest margin was at 4.1% on the total assets and 4.3% based on interest-earning assets. Other income, non-interest revenue, at ₹9,230 crore was 28.1% of the net revenues against ₹6,388 crore in the corresponding quarter ending June 30, 2022.

HDFC and HDFC Bank officially merged on July 1, 2023. The merger is touted to be the biggest transaction in India's corporate history, which will have combined assets of nearly ₹15 lakh crore, the second-largest after Mukesh Ambani-led conglomerate Reliance Industries (₹17.63 lakh crore).

Operating expenses for the quarter ending June 30, 2023, were ₹14,057 crore, an increase of 33.9% over ₹10,502 crore during the same quarter last year. The cost-to-income ratio for the quarter was 42.8%.

The bank's provisions and contingencies for the quarter ended June 30, 2023, were ₹2,860 crore against ₹3,188 crore in the year-ago period.

HDFC's balance sheet size as of June 30, 2023, was ₹25,01,693 crore vs ₹21,09,772 crore during the same period last year, a growth of 18.6%.

HDFC Bank's deposits for the period increased 19.2% to ₹19,13,096 crore over the same period last year. CASA deposits grew 10.7% with savings account deposits at ₹5,60,604 crore and current account deposits at ₹2,52,350 crore.

Total advances for the quarter were at ₹16,15,672 crore, an increase of 15.8% over June 30, 2022. Domestic retail loans grew 20%, commercial and rural banking loans grew 29.1%, and corporate and other wholesale loans grew 11.2% during the quarter.

The bank's total capital adequacy ratio (CAR) as per BASEL III guidelines was at 18.9% as on June 30, 2023, against a regulatory requirement of 11.7%.

The bank's network by the end of the quarter was at 7,860 branches and 20,352 ATMs or cash deposit and withdrawal machines across 3,825 cities.

HDFC Bank says its gross non-performing assets were at 1.17% of gross advances as on June 30, 2023, against 1.12% in the year-ago period. Its net NPAs were at 0.30% of net advances as on June 30, 2023.

The bank's consolidated revenue grew 25.9% to ₹35,067 crore for the first quarter of 2023-24 as compared to ₹27,844 crore in the year-ago period. The consolidated net profit was recorded at ₹12,370 crore, up 29.1%, and earnings per share was at ₹22.2.

The net profit of HDFC Bank subsidiaries, HDFC Securities and HDFC Financial Services was recorded at ₹189 crore and ₹567 crore, respectively.

Reacting to the development, the HDFC Bank stock rose 1.44% to ₹1,668.20 crore after opening the gap up at ₹1,650 today. The stock surged to an intra-day high of ₹1,660.65 on the BSE. At the current share price, HDFC Bank's market cap stands at ₹12,48,183.36 crore.