HDFC Bank decides against giving out dividend for FY21 due to 2nd wave of COVID-19
Private lender HDFC Bank on Saturday announced that its net profit rose 18.1% to ₹8,186.51 crore for the quarter ended 31 March, 2021. The Bank had posted a net profit of ₹6,927.69 crore in the year-ago period.
The Net Interest Income (NII) rose 12.6% to ₹17,120 crore in this quarter. It was ₹15,204 crore in the quarter ended 31 March, 2020.
However, sequentially, the standalone net profit declined 6.5% to ₹8,758.29 crore in the December quarter.
HDFC Bank’s gross non-performing assets (NPAs) rose 1.32% year-on-year as against 1.26%. The net NPAs stood at 0.40% as against 0.36% in the year-ago period.
However, due to uncertainty created by the second wave of novel coronavirus, the lender said that its Board has decided against giving out dividend for FY21.
“The impact of COVID-19, including changes in customer behaviour and pandemic fears, as well as restrictions on business and individual activities, has led to significant volatility in global and Indian financial markets and a significant decrease in global and local economic activities. The slowdown during the year led to a decrease in loan originations, the sale of third party products, the use of credit and debit cards by customers and the efficiency in collection efforts. This may lead to a rise in the number of customer defaults and consequently an increase in provisions there against,” the lender said in a regulatory filing.
Addressing the massive surge of novel coronavirus cases in the country, HDFC Bank states, “The extent to which the COVID-19 pandemic, including the current “second wave” that has significantly increased the number of cases in India, will continue to impact the Bank’s results will depend on ongoing as well as future developments, which are highly uncertain, including, among other things, any new information concerning the severity of the COVID-19 pandemic and any action to contain its spread or mitigate its impact whether government-mandated or elected by us.”
Shares of HDFC Bank closed at ₹1,428.45 on the BSE on Friday, down 0.12% from its previous close.
HDFC Bank recently informed the stock exchanges that its deposit base rose to about ₹13.35 trillion as on 31 March, registering a growth of around 16.3% on a year-on-year (y-o-y) basis. The bank said its low-cost current account and savings account (Casa) deposits grew 27% y-o-y to ₹6.15 trillion in Q4.
