HDFC Bank, a leading private sector lender, has posted stellar fourth-quarter results, showcasing robust growth across key financial metrics. This remarkable performance was largely fueled by a substantial 24.5% increase in net interest income (NII), which stood at ₹29,080 crore.
The core net interest margin, a crucial indicator of a bank’s profitability, remained strong at 3.44% on total assets and 3.63% based on interest-earning assets. Furthermore, the Board of Directors has recommended a dividend of ₹19.5 per equity share for the fiscal year ending March 31, 2024, reflecting the bank’s commitment to delivering value to its shareholders.
According to CFO Srinivasan Vaidyanathan, the bank’s credit environment remains favorable, with healthy performance observed across all segments. He highlighted the bank’s Gross Non-Performing Assets (GNPA) ratio, which improved to 1.24%, indicating prudent risk management practices.
In a strategic move to fortify its balance sheet, HDFC Bank has bolstered its floating provisions by ₹10,900 crore, enhancing its resilience to potential economic downturns. These provisions, while not earmarked for any specific portfolio, serve as a countercyclical buffer and contribute to the bank’s Tier 2 Capital within regulatory limits.
The bank’s total provisions and contingencies for the quarter ended March 31 amounted to ₹13,510 crore, inclusive of floating provisions. Excluding floating provisions, provisions and contingencies decreased to ₹2,610 crore compared to ₹2,690 crore in the corresponding period last year. This decline underscores the bank’s effective risk management strategies and asset quality maintenance.
HDFC bank performance
HDFC Bank’s performance was further bolstered by a significant surge in non-interest income, which more than doubled to ₹18,166 crore, primarily attributed to trading gains and mark-to-market adjustments. The bank’s prudent approach to divesting its stake in subsidiaries, such as HDFC Credila, also contributed to its exceptional financial performance.
The bank witnessed a substantial increase in total deposits, which grew by 26.4% year-on-year, reaching ₹23,79,800 crore as of March 31, 2024. Additionally, gross advances surged by 55.4% to ₹25,07,800 crore, reflecting robust demand for credit across various segments.
With a total Capital Adequacy Ratio (CAR) of 18.8% as per Basel III guidelines, HDFC Bank remains well-capitalized to support its growth trajectory and navigate evolving market dynamics. As the bank continues to prioritize innovation, customer-centricity, and prudent risk management, it is poised to sustain its momentum and drive value for all stakeholders in the foreseeable future.
HDFC Bank’s stellar performance in the fourth quarter underscores its resilience, prudent risk management, and strategic foresight amid a dynamic economic landscape. With robust growth across key financial parameters, the bank is well-positioned to capitalize on emerging opportunities and deliver sustainable value to its stakeholders.
