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HDFC Bank Q3 FY22 Results

19 January 2022
3 minutes

HDFC Bank released its earnings report for Q3 FY22 on January 15, 2022. The bank clocked an 18% YoY jump in its net profit at Rs 10,342 crore from Rs 8,758 crore on a standalone basis. On a sequential basis, HDFC bank’s net profit increased by Rs 1,508 crore to Rs 10,342 crore.

The bank’s net revenue (net interest income + other income jumped 12.1% YoY to Rs 26,627 crore from Rs 23,760 crore. The net interest income, which is the major source of income for the bank, saw a 13% YoY increase to Rs 18,443 crore from Rs 16,317 crore. The bank’s other income also came in at a 10% increase to Rs 8,183 crore from Rs 7,443 crore in the year-ago period. HDFC bank’s other income accounted for over 30% of the net revenue reported in the quarter under review.

The bank’s earnings report was largely in line with analysts’ estimates with HDFC Bank reporting an improvement in its asset quality. The bank’s gross NPAs were down to 1.26% after a dip of 9 basis points in the September-December quarter from 1.38% in the year-ago period. The net NPA ratio fell 3 basis points to 0.37%. HDFC bank’s total deposits grew by 13.8% YoY to Rs 14,45,918 crore from Rs 16,54,228 crore in Q3 FY21. While the bank reported a 24.6% YoY increase in its CASA deposits, it’s Capital Adequacy Ratio (CAR) was at 19.5% against the regulatory requirement of 11.7%.

HDFC Bank’s stock closed in the green at Rs 1,548.70, up by 1.12% after the end of the intraday trading session on January 14, 2022 ahead of its Q3 FY22 results.

Hits

  • Total deposits up by 13.8% YoY to Rs 14,45,918 crore from Rs 16,54,288 crore
  • Total advances up by 16.5% to Rs 12,60,863 crore
  • Retail loans up by 13.3%, commercial & rural loans up by 29.4%, corporate & other wholesale loans up by 7.5%
  • Capital Adequacy Ratio up at 19.5% from 18.9% in the previous quarter
  • Earnings Per Share up at Rs 18.7 from Rs 15.9 in the year ago period

Misses

  • Gross NPA increased to 1.26% in Q3 FY22 from 0.81% in Q3 FY21
  • Net NPA increased to 0.37% in Q3 FY22 from 0.09% in Q3 FY21
  • Return on assets largely remained flat at 0.56%
  • Marginal decline of 0.5% in the Capital Adequacy Ratio on a QoQ basis
  • Total provisioning accounts for 172% of the gross NPAs

Segment-wise revenue

  • Treasury: Revenue up at Rs 9,191 crore from Rs 8,201 crore in the year-ago period
  • Retail Banking: Revenue up at Rs 29,252 crore from Rs 27,812 crore in the year-ago period
  • Wholesale Banking: Revenue up at Rs 18,725 crore from Rs 14,329 crore in the year-ago period
  • Other Banking Operations: Revenue up at Rs 8,385 crore from Rs 7,848 crore in the year-ago period

What the Management says

The bank’s management issued a cautionary note on the COVID-19 pandemic hampering the loan business saying, “The impact of COVID-19, including changes in customer behaviour and pandemic fears, as well as restrictions on business and individual activities, has led to significant volatility in global and Indian financial markets and a significant decrease in global and local economic activities. The disruptions following the outbreak have impacted loan originations, the sale of third party products, the use of credit and debit cards by customers and the efficiency in collection efforts resulting in an increase in customer defaults and consequent increase in provisions there against. The extent to which the COVID-19 pandemic will continue to impact the Bank’s results will depend on ongoing as well as future developments, which are uncertain.”

Other things to know about HDFC Bank

  • HDFC Bank is the largest privately-owned bank in India with a market capitalization of Rs 8.46 lakh crore.
  • The bank’s P/E ratio is at 26.60 against the industry level of 28.61 while its P/B ratio is the second-highest at 4.02 against the industry average of 2.41. 

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