Conference Call with HDFC Bank Management and Goldman Sachs Analysts on the bank's earnings performance, FY21 outlook and overall horizon. Listen to the full call transcript.
On the Call: Shashidhar Jagadeesan, MD and CEO Designate, Srinivasan Vaidyanathan, CFO, Parag Rao, Group Head of Payments, Anjani Rathor, Group Head of Digital Banking
Conference Call with HDFC Bank Management including Aditya Puri and his team, with Credit Suisse Analysts. Listen to the full discussion. On call: Aditya Puri (former MD and CEO), Shashidhar Jagadeesan (new MD and CEO), Srinivasan Vaidyanathan (CFO).
Conference Call with HDFC Bank Management and Morgan Stanley Analysts on the Bank's Performance and Outlook for the bank as well as the broader economy.
On the call from the bank:
HDFC Bank CFO Srinivasan Vaidyanathan
Group Head Sashidhar Jagdishan
Listen to the full discussion.
Conference Call with HDFC Bank Management and Analysts on Q1FY21 Performance and Outlook. Listen to the full earnings transcript.
Earnings Call Transcript of the Conference Call between HDFC Bank Management and Analysts on Q4FY20 Earnings. Listen in to the full transcript here.
Key Highlights
In Q4FY20, we are positioned to gain strong market share. Liquidity is strong, LPR ratio is 132%. Incremental credit to deposit ratio is 78% on average. Capital adequacy ratio is at 18.5%, significantly more than the regulatory minimum of 11.08%.
Our CET1 (measure of bank solvency) at 16.4%, is high compared to the regulatory minimum of 7.58%.
We have sufficient provisions totalling to Rs. 4,447 crore built over time. We have tightened credits, so there are more rejects of applications.
Provision coverage ratio across the board stands at 142%. The net interest margin has been stable historically in the range of 4.1%-4.5% and is currently at 4.3%.
Impact in latter half of March in loan origination, collections, and so on. Waiving of certain fees has also been implemented as per RBI mandate. There was good demand from customers prior to lockdown.
Net revenues grew by 18.2% driven by an advances growth of 21.3%, deposits growth of 24.3% and other income growth of 23.8%.
Net interest income for the quarter was Rs. 15,204 crore, up 16.2% YoY and grew 7.3% over previous quarter.
Net interest margin was in the historical range, for the quarter the margin was 4.3%. For context prior year was 4.4%, prior quarter 4.2%
We build on deposits to ensure liquidity surplus. The excess liquidity position impacts current NIM by about 10 basis points.
Other income - fees and commission (70% of other income) grew by 14.6% over previous year to reach Rs. 4,201 crore. Of this retail constitutes 93% and wholesale 7%.
The lockdown has impacted various aspects of fees and commission by around Rs. 350 crore.
Our card spends saw March average lower than January and February by around 21%. The second half of March was particularly impacted where the average spend was 35% lower compared to January and February.
Fx and derivatives income grew by 24% over previous year to reach Rs. 501 crore. The growth was granular, primarily by retail customers constituting two thirds of total. Trading income was Rs. 565 crore for the quarter.
Other misc income Rs. 766 crore includes recoveries and dividends from subsidiaries.
Operating expenses for the quarter was Rs. 8278 crore, and increase of 16.3% YoY. Added 313 banking outlets over the year. Staff count increased by 2919 during the quarter.
Cost to income was 39% and has remained in the stable range.
PPOP: Pre provision of operating profit grew to 19.5% to Rs. 12,959 crore. Adjusted for the covid impact, that would have been at 22%.
Asset quality: Asset classification remains at standstill during the moratorium period for customers granted moratorium. GNPA, NNPA and Annualized Core Slippage Ratio has been lowered by 10 bps, 6 bps and 40 bps respectively. GNPA ratio was 1.26% of gross advances as compared to 1.42% in the prior quarter and 1.36% last year. GNPA excluding agriculture NPAs was 1.1%, NNPA was at 0.36% of net advances compared to 0.48% in the previous quarter and 0.39% in the previous year. Annualized Core Slippage Ratio was 1.2%, compared to 1.7% in previous quarter and 1.4% in previous year.
Provisions: Total provisions was Rs. 3,784 crore, compared to Rs. 3,044 crore in previous quarter. Coverage ratio at 72% compared to 67% in prior quarter and 72% in prior year. Including contingent provisions related to covid, the coverage ratio is at 96%.
Contingent provisions at the beginning of the quarter was Rs. 1,457 crore. At the end of the quarter it is at Rs. 2,996 crore. Floating provisions at Rs. 1451 crore and general provisions at Rs. 4438 crore. At March end all total provisions was 142% of gross non performing loans.
Banking is an essential service and has been exempted from the lockdown. By and large branches remain open for customers - 95% of bank branches are operational with limited activities, as are 93% of ATMs. Deployed mobile atms in select cities. We have encouraged online banking so that people transact from home. 200,000 customer engagements on a daily basis.
On the wholesale front we are 100% work from home. Handling all processes digitally. 35,000 customers have been called and feedback taken on Covid impact and their welfare.
Listen to the full conference call transcript between analysts and management of HDFC Bank
