INSUBCONTINENT EXCLUSIVE:
NEW DELHI: HDFC Bank on Saturday marginally missed Street earnings estimates as it doubled its provisions in order to deal with
Covid-related contingencies that may arise in the near future.
It reported 17.7 per cent year-on-year (YoY) rise in net profit at Rs
Net interest income for the quarter climbed to Rs 15,204 crore from Rs 13,089 crore, beating the estimate of Rs 14,900.
Here are the key
takeaways from the earnings report card: Covid-19 fee losses at Rs 450 croreThe lender said due to the strict lockdown and social distancing
measures announced by the government, it could not optimise its collection efforts which resulted in Rs 450 crore in fees/other income
The bank added that the lockdown also had an impact on different businesses including its loan, distribution, payment and third party
products.
Provisions doubleHDFC Bank doubled the amount it keeps aside to take care of contingencies mainly on expected hit from
Bad loan provisions increased by Rs 488 crore to Rs 1,918 crore while general provisions quadrupled to Rs 1,867 crore from Rs 459 crore last
which the pandemic will impact the bank's results will depend on future developments, which are highly uncertain.
The bank added that the
loan classification will remain standstill during the three-month moratorium period
The central bank on Saturday asked banks to freeze classifying their assets as bad loans due to the moratorium granted on them.
Bad loans
come downGross non-performing assets (NPA) for the quarter eased to 1.26 per cent from 1.42 per cent in December quarter and 1.36 per cent
However, net NPA ratio to advances came down to 0.36 per cent from 0.39 per cent.
No dividend as directed by RBIThe bank said it will not
pay any dividend to its shareholders after the Reserve Bank of India asked the banks to not do so
RBI is of the view that banks must conserve capital in an environment of heightened uncertainty caused by Covid-19.
Accordingly, the Board
of Directors of the bank, at their meeting held on Saturday, did not propose any final dividend for the year ended March 31, 2020, the
lender said in a regulatory filing
