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HDFC Bank Earned 6658.60 Cr. Net Profit

The Board of Directors of HDFC Bank Limited approved the Bank’s (Indian GAAP) results for the quarter ended June 30, 2020, During the Period Profit before tax (PBT) for the quarter ended June 30, 2020 was at ₹ 8,937.8 crore. After providing ₹ 2,279.1 crore for taxation, the Bank earned a net profit of ₹ 6,658.6 crore, an increase of 19.6% over the quarter ended June 30, 2019.

The Bank’s net revenues (net interest income plus other income) grew to ₹ 19,740.7 crore for the quarter ended June 30, 2020 from ₹ 18,264.5 for the quarter ended June 30, 2019.

Net interest income (interest earned less interest expended) for the quarter ended June 30, 2020 grew by 17.8% to ₹ 15,665.4 crore from ₹ 13,294.3 crore for the quarter ended June 30, 2019, driven by growth in advances of 20.9%, and a growth in deposits of 24.6%. The net interest margin for the quarter was at 4.3%.

Other income (non-interest revenue) at ₹ 4,075.3 crore was 20.6% of the net revenues for the quarter ended June 30, 2020 as against ₹ 4,970.3 crore in the corresponding quarter ended June 30, 2019. The four components of other income for the quarter ended June 30, 2020 were fees & commissions of ₹ 2,230.7 crore (₹ 3,551.6 crore in the corresponding quarter of the previous year), foreign exchange & derivatives revenue of ₹ 436.6 crore (₹ 576.7 crore for the corresponding quarter of the previous year), gain on sale / revaluation of investments of ₹ 1,086.7 crore (gain of ₹ 212.0 crore in the corresponding quarter of the previous year) and miscellaneous income, including recoveries and dividend, of ₹ 321.3 crore (₹ 630.0 crore for the corresponding quarter of the previous year).

The continued slowdown in economic activity has led to a decrease in retail loan origination, sale of third party products, use of credit and debit cards by customers, efficiency in collection efforts and waivers of certain fees. As a result, fees/other income were lower by approximately ₹ 2,000 crore.

Operating expenses for the quarter ended June 30, 2020 were ₹ 6,911.5 crore, a decrease of 2.9% over ₹ 7,117.3 crore during the corresponding quarter of the previous year. The cost-to-income ratio for the quarter was at 35.0% as against 39.0% for the corresponding quarter ended June 30, 2019. Operating expenses were lower primarily due to lower loan origination and sales volumes.

Pre-provision Operating Profit (PPOP) at ₹ 12,829.3 crore grew by 15.1% over the corresponding quarter of the previous year. Provisions and contingencies for the quarter ended June 30, 2020 were ₹ 3,891.5 crore (consisting of specific loan loss provisions of ₹ 2,739.8 crore and general provisions and other provisions of ₹ 1,151.7 crore) as against ₹ 2,613.7 crore (consisting of specific loan loss provisions of ₹ 2,248.0 crore and general provisions and other provisions of ₹ 365.7 crore) for the quarter ended June 30, 2019. Total provisions for the current quarter included contingent provisions of approximately ₹ 1,000 crore. The Core Credit Cost ratio was 1.08%, as compared to 0.77% in the quarter ending March 31, 2020 and 1.07% in the quarter ending June 30, 2019.

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