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- HDFC BANK 2021-22 Annual Report Analysis
HDFC BANK has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the bank during the year 2021-22.
HDFC BANK Income Statement Analysis
- Interest income during the year rose 5.7% on a year-on-year (YoY) basis.
- Interest expenses were down by 1.1% YoY during the same period.
- Operating expenses increased by 15.2% YoY during the year.
- The bank's net interest income (NII) increased by 11.6% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a decline and stood at 4.1% in FY22 as against 4.3% in FY21.
- Other income increased by 16.2% YoY during the year.
- Net profit for the year increased by 19.5% YoY.
- Net profit margins during the year increased to 28.0% in FY22 from 24.8% in FY21.
HDFC BANK Income Statement – 2021-22
| No. of Mths Year Ending | 12 Mar-21* | 12 Mar-22* | % Change | |
|---|---|---|---|---|
| Interest Income | Rs m | 1,285,524 | 1,359,364 | 5.7% |
| Other Income | Rs m | 273,329 | 317,590 | 16.2% |
| Interest Expense | Rs m | 592,476 | 585,843 | -1.1% |
| Net Interest Income | Rs m | 693,048 | 773,521 | 11.6% |
| Operating Expense | Rs m | 350,013 | 403,124 | 15.2% |
| Pre-provision Operating Profit | Rs m | 616,364 | 687,986 | 11.6% |
| Provisions & Contingencies | Rs m | 297,797 | 306,477 | 2.9% |
| Profit before tax | Rs m | 427,962 | 508,734 | 18.9% |
| Tax | Rs m | 109,394 | 127,225 | 16.3% |
| Profit after tax | Rs m | 318,332 | 380,528 | 19.5% |
| Minority Interest | Rs m | -236 | -982 | -316.6% |
| Net Interest Margin | % | 4.3 | 4.1 | |
| Net profit margin | % | 24.8 | 28.0 | |
* Results Consolidated
Source: Accord Fintech, Equitymaster
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HDFC BANK Balance Sheet Analysis
- The bank's deposits during FY22 stood at Rs 15,580.0 bn as compared to Rs 13,337.2 bn in FY21, thereby witnessing an increase of 16.8%.
- Advances for the year stood at Rs 14,209.4 bn as compared to Rs 11,852.8 bn during FY21, a rise of 19.9%.
- Cost of deposits for HDFC BANK fell 16.5% and stood at 3.1%, while yield on advances fell to 7.5%.
- The lender's investments rose to Rs 4,492.6 bn during the year from Rs 4,388.2 bn in FY21.
- Borrowing stood at Rs 2,269.7 bn, a growth of 27.7% as compared to previous year.
- Overall, the total assets and liabilities for FY22 stood at Rs 21,229.3 bn as against Rs 17,995.1 bn during FY21, thereby witnessing a rise of 18.0%.
HDFC BANK Balance Sheet – as on March 2022
| No. of Mths Year Ending | 12 Mar-21* | 12 Mar-22* | % Change | |
|---|---|---|---|---|
| Networth | Rs m | 2,098,102 | 2,469,857 | 17.7% |
| Advances | Rs m | 11,852,835 | 14,209,423 | 19.9% |
| Deposits | Rs m | 13,337,209 | 15,580,030 | 16.8% |
| Yield on advances | % | 8.6 | 7.5 | |
| Cost of Deposits | % | 3.8 | 3.1 | |
| Investments | Rs m | 4,388,231 | 4,492,639 | 2.4% |
| Borrowings | Rs m | 1,776,968 | 2,269,665 | 27.7% |
| Total Assets | Rs m | 17,995,066 | 21,229,343 | 18.0% |
* Results Consolidated
Source: Accord Fintech, Equitymaster
Current Valuations for HDFC BANK
- The trailing twelve-month earnings per share (EPS) of the bank stands at Rs 68.6, an improvement from the EPS of Rs 57.7 recorded last year.
- The price to earnings (P/E) ratio, at the current price of Rs 1,469.9, stands at 22.0 times its trailing twelve months earnings.
- The price to adjusted book value (P/ABV) ratio at current price levels stands at 3.3 times, while the price to income ratio stands at 6.2 times.
Per Share Data/Valuations
| No. of Mths Year Ending | 12 Mar-21* | 12 Mar-22* | |
|---|---|---|---|
| Income per share (Unadj.) | Rs | 233.2 | 245.1 |
| Earnings per share (Unadj.) | Rs | 57.7 | 68.6 |
| Diluted earnings per share | Rs | 57.1 | 68.2 |
| Avg P/E ratio | Rs | 21.3 | 22.0 |
| Avg P/ABV ratio | Rs | 4.0 | 3.3 |
| Avg Market Cap | Rs | 6,780,715 | 8,363,508 |
| Dividends per share (Unadj.) | Rs | 6.50 | 15.50 |
* Results Consolidated
Source: Accord Fintech, Equitymaster
Ratio Analysis for HDFC BANK
Efficiency Ratios
Credit/Deposit Ratio: The bank's credit/deposit ratio improved and stood at 91.2x during FY22, from 88.9x during FY21. The credit/deposit ratio tells us how much money a bank has raised in the form of deposits and has deployed as loans.
Debt to Equity Ratio: The bank's debt to equity ratio increased and stood at 7.23x during FY22, from 7.20x during FY21. The debt to equity ratio of a bank tells us how much debt a bank uses relative to its equity.
Liquidity Ratios
Capital Adequacy Ratio (CAR): HDFC BANK's capital adequacy ratio (CAR) was at 18.9% as on 31 March 2022 as compared to 18.8% a year ago. This ratio helps measure the financial strength of the bank or any finance company to meet their obligations using their assets and capital.
A bank that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.
Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the bank's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a bank sets aside for covering losses due to bad debts.
See AlsoBank Efficiency Ratio | Operational Efficiency in Banking | West MonroeThe 10 Largest Banks In The World In 2024 - Forbes IndiaHDFC Bank Share Price Target 2024: India’s largest lender’s stock drops over 14% in one month! Should you BUY, HOLD or SELL?Where is Nifty Bank headed after HDFC Bank drags it down by 1,050-point?So a high PCR ratio means asset quality issues are under control and the bank is not vulnerable.
Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that banks hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.
Profitability Ratios
Return on Equity (ROE): The return on equity (ROE) ratio for the bank improved and stood at 15.4% during FY22, from 15.2% during FY21. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.
Return on Assets (ROA): The return on asset (ROA) ratio of the bank improved and stood at 1.79% during FY22, from 1.77% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.
Return on Capital Employed (ROCE): The ROCE for the bank improved and stood at 14.05% during FY22, from 13.83% during FY21. The ROCE measures the ability of a bank to generate profits from its total capital (shareholder capital plus debt capital) employed in the bank.
NPA Ratios
Gross NPA Ratio: The gross NPA ratio is the ratio of a bank's gross NPAs to gross advances. HDFC BANK's gross NPA ratio stood at 1.2% as of 31 March 2022 compared to 1.3% in the same period a year ago.
A high gross NPA ratio is a bad thing as it indicates how much of a bank's loans are in danger of not being repaid.
Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the bank has made provisions.
The net NPA ratio of HDFC BANK was 0.3% in financial year 2022. This compared with 0.4% a year ago.
Key Ratio Analysis
| No. of Mths Year Ending | 12 Mar-21* | 12 Mar-22* | |
|---|---|---|---|
| Credit/Deposit Ratio | x | 88.9 | 91.2 |
| Debt to Equity Ratio | x | 7.2 | 7.2 |
| Loans / Deposits | x | 0.1 | 0.1 |
| Capital Adequacy Ratio | % | 18.8 | 18.9 |
| Return on Equity | % | 15.2 | 15.4 |
| Return on Assets | % | 1.8 | 1.8 |
| Return on Capital Employed | % | 13.8 | 14.1 |
| % of Gross NPAs | % | 1.3 | 1.2 |
| % of Net NPAs | % | 0.4 | 0.3 |
| Yield on Advances | x | 8.6 | 7.5 |
| Yield on Investments | x | 6.5 | 5.9 |
* Results Consolidated
Source: Accord Fintech, Equitymaster
To see how HDFC BANK has performed over the last 5 years, please visit here.
HDFC BANK Share Price Performance
Over the last one year, HDFC BANK share price has moved down from Rs 1,493.6 to Rs 1,469.9, registering a loss of Rs 23.6 or around 1.6%.
Meanwhile, the S&P BSE BANKEX is trading at 41,753.8 (up 0.1%). Over the last one year it has moved up from 37,547.9 to 41,753.8, registering a gain of 4,205.9 points (up 11.2%).
Overall, the S&P BSE SENSEX is up 16.8% over the year.
(To know more, you can check out historical annual results for HDFC BANK here and quarterly results for HDFC BANK here)
Annual Report FAQs
What is the current share price of HDFC BANK?
HDFC BANK currently trades at Rs 1,384.0 per share. You can check out the latest share price performance of HDFC BANK here...
What was the net interest income of HDFC BANK in FY22? How does it compare to earlier years?
The net interest income of HDFC BANK stood at Rs 773,521 m in FY22, which was up 11.6% compared to Rs 693,048 m reported in FY21.
HDFC BANK's net interest income has grown from Rs 429,064 m in FY18 to Rs 773,521 m in FY22.
Over the past 5 years, the net interest income of HDFC BANK has grown at a CAGR of 15.9%.
What was the net profit of HDFC BANK in FY22? How does it compare to earlier years?
The net profit of HDFC BANK stood at Rs 380,528 m in FY22, which was up 19.5% compared to Rs 318,332 m reported in FY22.
This compares to a net profit of Rs 272,540 m in FY20 and a net profit of Rs 223,324 m in FY19.
Over the past 5 years, HDFC BANK''s net profit has grown at a CAGR of 19.7%.
What does the Key Ratio analysis of HDFC BANK reveal?
Be it the bank's profitability, operations effectiveness or utilization of funds, ratio analysis is an important tool which helps in making investment decisions.
The ratio/financial analysis of HDFC BANK reveals:
- Net interest margin declined from 4.3% in FY21 to 4.1% in FY22.
- Net profit margins grew from 24.8% in FY21 to 28.0% in FY22.
- Debt to Equity ratio for FY22 stood at 7.2 as compared to 7.2 in FY21.
Here's the ratio/financial analysis of HDFC BANK for the past 5 years.
| FY18 | FY19 | FY20 | FY21 | FY22 | |
|---|---|---|---|---|---|
| Net Interest Margin (%) | 4.6 | 4.4 | 4.2 | 4.3 | 4.1 |
| Net Profit Margin (%) | 21.7 | 21.2 | 22.3 | 24.8 | 28.0 |
| Debt to Equity Ratio (x) | 8.6 | 7.0 | 7.6 | 7.2 | 7.2 |
Read: Latest Annual Report Analysis of HDFC BANK
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