HDFC Bank Posts Strong Financial Results In First Announcement Since Mega Merger

In its first financial results announcement since its mega merger, which was completed last quarter, HDFC Bank seems to have given a sigh of relief to its investors by posting strong financial results for Q2 (July-Sept quarter) of the financial year 2023每24.

What Has HDFC Bank Announced In Q2 Results?

businesstoday

HDFC Bank on Monday reported a 51% year-on-year (YoY) rise in net profit for the quarter ended September 2023 to Rs 15,976 crore. The bank＊s shares are currently up nearly 1% since this morning.

As far as its balance sheet is concerned, the total deposits of HDFC Bank stood at Rs 21.73 lakh crore as of September 30, up nearly 30% from the year-ago period.

Gross advances were Rs 23.55 lakh crore as of September 30, up 58% from the year-ago period. Domestic retail loans grew by 112%, commercial and rural banking loans rose by 29.5%, and corporate and wholesale loans rose by 7.9%.

Also, HDFC Bank＊s total income for the quarter increased 70% YoY to Rs 78,406 crore. Net interest income (NI), the difference between interest earned and interest expended, rose more than 30% year over year to Rs 27,385 crore but was lower than the estimated Rs 28,500 crore, as per the ET report.

Provisions for the quarter declined to Rs 2,904 crore from Rs 3,240 crore a year ago. The operating profit of the private sector lender grew 30.5% YoY to Rs 22,694 crore. The gross non-performing assets as a percentage of total loans were 1.34% as of September 30, compared with 1.23% a year ago and 1.17% a quarter ago.

The net non-performing assets ratio was 0.35% as of September 30, compared with 0.33% a year ago and 0.30% a quarter ago.

Also Read: Deepak Parekh's 1978 Offer Letter Goes Viral

When Did The HDFC-HDFC Bank Merger Happen?

indiatimes

On July 1, 2023, India witnessed its biggest-ever merger in corporate history. Housing finance company HDFC Ltd. got merged with HDFC Bank.

Another landmark moment that was witnessed along with this merger was HDFC Chairman Deepak Parekh's retirement. At the age of 78, when he announced his retirement after spending nearly 45 years at the corporation, Parekh said, ※It is my time to hang my boots with both anticipation and hope for the future. While this will be my last communication to shareholders of HDFC, rest assured that we now stride tall into a very exciting future of growth and prosperity."

Also Read: Here's Why The Man Who Built HDFC Never Owned More Than 1% Of It

How HDFC Bank＊s CEO Has Reacted To The Results

indianexpress

The non-retail book that HDFC Bank Ltd. inherited from Housing Development Finance Corp. as part of a mega merger may see some more accounts in the "sub-standard" category, the bank's Managing Director and Chief Executive Officer Sashidhar Jagdishan said, as per the BQPrime report.

"Some tail" may be left in the non-retail portfolio. However, the impact of this may not be substantial, Jagdishan said while speaking to analysts after announcing the bank's second quarter results on Monday.

"Yes, there could be some tail remaining from this book which could slip into substandard in the future... I can categorically say that the bank will not incur any incremental cost or losses on account of this book, going forward," Jagdishan told analysts.

This is largely because the bank has made adequate provision to cover any potential losses after considering the realisable value of securities available against them. However, the CEO did not detail the amount of these provisions made during the July每September quarter.

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