HDFC Bank - Q3FY22 First Cut - ICICI Direct

Pick up in business momentum, mixed operational performance and prudent asset quality.

Q3FY22 Earnings Summary

• HDFC Bank posted steady operating performance with NII growth of 13.0% YoY and 4.3% QoQ to Rs. 18443 crore, primarily helped by stable NIMs at 4.1% on sequential basis and 5.2% QoQ uptick in advances. Other income showed jump of 9.9% YoY and 10.6% QoQ to 8183 crore, wherein fee income growth was modest at 2% while treasury income was up by 69% YoY and 55% QoQ. Rise in income was equally matched by rise in cost on a sequential basis and as a result C/I ratio remained steady at 37% QoQ
• During the quarter, bank made provisions worth Rs. 2994 crore, down by 12.3% YoY and 23.7% QoQ. Decline in provisions is primarily due to better performance on the asset quality front. Credit cost thus came down to 0.94% versus 1.3% in the previous quarter. Q3FY22 provisions included Rs. 900 crore worth contingent provisions. The bank currently holds floating provisions worth Rs. 1451 crore and contingent provisions of Rs. 8636 crore (together at ~80 bps pf advances). Total provisions including specific, general, floating now stand at 172% of total GNPA
• Thus due to lower credit cost, net profit for the bank came in at Rs. 10342 crore, up 18.1% YoY
• Asset quality improved on a sequential basis as GNPA and NNPA declined by 9 bps and 3 bps QoQ to 1.26% and 0.37% respectively
• Loan growth for the quarter gained momentum sequentially and advances were up 16.5% YoY and 5.2% QoQ to Rs. 12.6 lakh crore. Retail loans saw 13.3% YoY jump while commercial and rural segment saw healthy uptick of 29.4% YoY while corporate portfolio was up by 7.5% YoY
• Deposit accretion was decent at 13.8% YoY to Rs. 14.4 lakh crore. CASA deposits reported even stronger growth of 24.6% YoY and as a result CASA ratio increased from 41.6% to 47.1% YoY. Sequentially also CASA ratio was up by 31 bps
• The bank 's subsidiary HDB Financial services saw improved performance on profitability and asset quality front as PAT came in at Rs. 304 crore as compared to Rs. 192 crore in Q2FY22 and a loss of Rs. 146 crore in Q3FY21. Asset quality saw some improvement as GNPA declined 5 bps QoQ to 6.05%. Loan growth however was flattish YoY at Rs. 60478 crore. Broking business HDFC Securities total income was up 58% YoY at Rs. 535 crore and net profit jumped at similar pace of 58% YoY to Rs. 258 crore

HDFC Bank's overall performance remained mix. Management commentary on future growth, credit card business and impact of third wave of pandemic will be keenly watched.

We will be coming out with a detailed report soon.

Shares of HDFC Bank Limited was last trading in BSE at Rs. 1545.25 as compared to the previous close of Rs. 1528.35. The total number of shares traded during the day was 262320 in over 14453 trades.

The stock hit an intraday high of Rs. 1548.45 and intraday low of 1519.65. The net turnover during the day was Rs. 402729267.00.

Source : Equity Bulls

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HDFCBank INE040A01034 HDB Q3FY22 Results FirstCut ICICIDirect