HDFC Bank Q1 Results: Net profit drops 2% to ₹16,175 crore, NII up 2.6% QoQ; Asset quality declines

HDFC Bank Q1 Results: HDFC Bank announced its April-June quarter results for fiscal 2024-25 (Q1FY25) on Saturday, July 20, reporting a drop of two per cent in net profit at ₹16,175 crore, compared to ₹16,511.9 crore in the preceding January-March quarter of FY24. 

India's leading private lender's net interest income (NII)—the difference between interest earned and paid—rose 2.6 per cent sequentially to ₹29,837 crore, compared to ₹29,078 crore in the fourth quarter of FY24. 

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HDFC Bank Q1 Results: Key Metrics

-The gross non-performing asset (NPA) rose six per cent sequentially to ₹33,026 crore in the June quarter, compared to ₹31,173 crore in the preceding March quarter. The gross NPA ratio jumped nine basis points sequentially, as it stood at 1.33 per cent in Q1FY25 as against 1.24 per cent in Q4FY24.

-The net NPA rose 17.5 per cent sequentially. It stood at ₹9,508.4 crore in Q1FY25, as against ₹8.091.7 crore in Q4FY24. The net NPA ratio increased by 6 basis points to 0.39 per cent, as against 0.33% in the preceding March quarter.

-Total deposits stood at ₹23,791 billion as of June 30, 2024, an increase of 24.4 per cent over June 30, 2023. Current account and savings account (CASA) deposits grew by 6.2 per cent, with savings account deposits at ₹5,964 billion and current account deposits at ₹2,673 billion.

-Time deposits stood at ₹15,154 billion, an increase of 37.8 per cent over the corresponding quarter of the previous year. As of June 30, 2024, the CASA deposits comprised 36.3 per cent of the total deposits.

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-The bank's provisions for the quarter stood at ₹2,602 crore, a reduction from ₹13,511.64 crore in the previous quarter. Its core net interest margin was 3.47 per cent on total assets and 3.66 per cent on interest-earning ones, versus 3.44 per cent and 3.63 per cent, respectively, in the previous quarter.

-Gross advances were at ₹24,869 billion as of June 30, 2024, an increase of 52.6 per cent as compared to the year-ago period. Retail loans grew 100.4 per cent, commercial and rural banking loans rose 23.0 per cent and corporate and other wholesale loans grew by 18.7 per cent.

-Overseas advances constituted 1.5 per cent of total advances. As of June 30, 2024, the bank's distribution network stood at 8,851 branches, as against 7,860 branches as of June 30, 2023. This means that the bank's network of branches has increased by 991 in the last 12 months.

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-Around 52 per cent of the bank's branches are in semi-urban and rural areas. “In addition, we have 15,146 business correspondents, which are primarily manned by Common Service Centres (CSC),” said HDFC Bank in a regulatory filing to the stock exchanges.

-HDFC Bank said its total number of employees at the end of the June 2024 quarter stood at 2,13,069, which is 17.2 per cent higher than the 1,81,725 employees at the end of the June 2023 quarter.

-HDFC Bank merged with parent Housing Development Finance Corp (HDFC) in July 2023, so its results are not comparable on a year-over-year (YoY) basis. The merger with HDFC added a large pool of mortgage loans to the bank's portfolio but a much smaller amount of deposits. This has put it under pressure to increase the pace at which it raises deposits or slow loan growth.

On Friday, shares of HDFC Bank settled 0.46 per cent lower at ₹1,607.10 apiece on the BSE.