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HDFC Bank: Punjab Food Scam Spikes Provisions - Views on News from Equitymaster
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HDFC Bank: Punjab Food Scam Spikes Provisions
Apr 25, 2016 | Updated on Apr 26, 2016

HDFC Bank declared the results for the fourth quarter of financial year ending March 2016 (4QFY16). The bank has reported 24% YoY and 20% YoY growth in net interest income and net profits respectively in 4QFY16. For the full year FY16 also, profits have grown by 20% YoY. Here is our analysis of the results.

Performance summary
  • Net interest income grows 23.2% YoY in FY16 on the back of 27% YoY growth in advances.
  • NIMs correct marginally to 4.3% due to lower loan yields.
  • Other income grows by a robust 19.5% YoY, with fees and commissions growing at 18% YoY.
  • Cost to income ratio remains stable at 44% at the end of March 2016.
  • Net NPA to advances move slightly higher to 0.3% in FY16 despite higher provisioning, as the gross NPAs stay at 0.9% of advances.
  • Capital adequacy ratio (CAR) comfortable at 15.5%, Tier I CAR at 13.2% at the end of March 2016.

    Rs (m) 4QFY15 4QFY16 Change FY16 FY17 Change
    Interest income 130,064 159,967 23.0% 484,699 602,214 24.2%
    Interest expense 69,932 85,434 22.2% 260,742 326,299 25.1%
    Net Interest Income 60,132 74,533 23.9% 223,957 275,915 23.2%
    Net interest margin (%) 4.4% 4.3%
    Other Income 25,637 28,658 11.8% 89,963 107,517 19.5%
    Other Expense 38,549 45,843 18.9% 139,875 169,796 21.4%
    Provisions and contingencies 5,766 6,625 14.9% 20,757 27,256 31.3%
    Profit before tax 47,220 57,348 21.4% 174,045 213,636 22.7%
    Tax 13,383 16,982 26.9% 51,128 63,417 24.0%
    Profit after tax/ (loss) 28,071 33,741 20.2% 102,160 122,963 20.4%
    Net profit margin (%) 21.6% 21.1% 21.1% 20.4%
    No. of shares (m)* 2,528.2
    Book value per share (Rs) 287.5
    P/BV (x)* 3.8

    * Book value as on 31st March 2016

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