The bank’s pro forma net NPA ratio would have been 0.4%. Its reported gross NPA ratio in Q3 was 0.81% and net NPA ratio was 0.09%. HDFC Bank on Saturday reported an 18% year-on-year (y-o-y) growth in net profit for the quarter ended December to Rs 8,578 crore on the back of a 15% y-o-y rise in net interest income (NII) to Rs 16,317.6 crore, with non-interest income growing 11.6% y-o-y. The bank’s non-bank subsidiary posted a loss during the quarter.
The bank’s provisions rose 12% y-o-y to Rs 3,414 crore. In a statement, HDFC Bank said total provisions for the current quarter includes contingent provisions of approximately Rs 2,400 crore for proforma non-performing assets (NPA).
It said if it had recognised as bad the accounts which were not declared NPA till August 31, 2020, under the Supreme Court’s orders, the pro forma gross NPA ratio would have been 1.38% as on December 31, 2020.
It would have been 1.37% as on September 30, 2020 and 1.42% as on December 31, 2019.
The bank’s pro forma net NPA ratio would have been 0.4%. Its reported gross NPA ratio in Q3 was 0.81% and net NPA ratio was 0.09%. The restructuring under the Reserve Bank of India’s (RBI) resolution framework for Covid-19 was approximately 0.5% of advances.
“Pending disposal of the case, the bank, as a matter of prudence, has made a contingent provision in respect of these accounts,” the lender said. It also continues to hold provisions as on December 31, 2020 against the potential impact of Covid-19 based on the information available at this point in time and in excess of prescribed norms. The bank held floating provisions of Rs 1,451 crore and contingent provisions of `8,656 crore as on December 31, 2020. Total provisions (comprising specific, floating, contingent and general provisions) were 260% of the reported gross NPAs or 148% of pro forma gross NPAs as on December 31, 2020.
Core net interest margin (NIM) in Q3 rose to 4.2% from 4.1% at the end of September.
Total advances as on December 31, 2020 were Rs 10.82 lakh crore, up 15.6% over December 31, 2019. Domestic advances grew by 14.9% y-o-y. Domestic retail loans grew by 5.2% and domestic wholesale loans grew by 25.5%. The domestic loan mix as per Basel 2 classification between retail:wholesale was 48:52.
Total deposits as on December 31 were Rs 12.71 lakh crore, an increase of 19% over December 31, 2019. Current account savings account (CASA) deposits grew 29.6% y-o-y, with SA deposits at Rs 3.75 lakh crore and CA deposits at Rs 1.72 lakh crore. Time deposits stood at Rs 7.24 lakh crore, an increase of 12.2% over the previous year. The CASA ratio stood at 43%, up from 42.2% a quarter ago.
The Bank’s total capital adequacy ratio (CAR) as per Basel III guidelines was at 18.9% as on December 31, 2020 (18.5% as on December 31, 2019) 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 17.6% as of December 31, 2020 compared to 17.1% as of December 31, 2019. Common equity tier 1 capital ratio was at 16.8% as of December 31, 2020. Risk weighted assets were at Rs 10.92 lakh crore, as against Rs 9.51 lakh crore as on December 31, 2019.
The bank’s NBFC subsidiary HDB Financial Services posted a net loss of Rs 44.3 crore in Q3. The company’s total provisions for the quarter at Rs 818.8 crore exceeded its operating profit of Rs 748.7 crore The total loan book grew by 1.7% y-o-y to `57,710 crore as on December 31, 2020. The gross and net NPA were 2.7% of gross advances and 1.7% of net advances respectively. “However, if the Company had classified borrower accounts as NPA after August 31, 2020 along with the NBFC recognition methodology for NPAs (proforma approach), the proforma Gross NPA ratio would have been 5.9% as on December 31, 2020, as against 5.1% as on September 30, 2020 and 2.9% as on December 31, 2019,” HDFC Bank said.
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