HDFC Bank Limited

Ladies and gentlemen, good evening and welcome to the HDFC Bank Q4FY19 earnings conference on the financial results presented by Mr. Srinivasan Vaidyanathan, Deputy Chief Financial Officer. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after a brief commentary by the management. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Srinivasan Vaidyanathan. Thank you and over to you, sir.

Thank you very much. You all should have received a copy of the results released. Now, highlights for the quarter and year ended March 31, 2019. The bank's total income for the quarter ended March 31, 2019 at Rs. 31,204.5 crore grew by 22.1% from Rs. 25,549.7 crore in the corresponding previous year's quarter. Net revenues for the quarter amounted to Rs. 17,960.7 crore. Net interest income for the quarter was Rs. 13,089.5 crore registering a growth of 22.8%. The core net interest margin for the quarter was 4.4%. Other income for the quarter amounted to Rs. 4,871.2 crore, which grew by 15.2% for the corresponding prior year quarter. Looking at the breakup of the other income for the quarter, fees and commission income constituting 75.8% of other income grew by 10.9% to reach 3,692.1 crore. Effects and derivatives at 403.3 crores compared to 416.4 crores in the prior quarter, prior year corresponding quarter. Profit loss on investments were at 228.9 crores against a loss of 22 crores in the prior year corresponding quarter. Recovery and miscellaneous income at 546.9 crores grew by 8.4%. In summary, the total other income, as I said before, 4,871.2 crore grew by 15.2%. Operating expenses for the quarter were 7,117.1 crore, an increase of 17.6% over the corresponding quarter of the previous year. Core cost-to-income ratio for the quarter ended March 31, 2019, was 40.1%, against 40.6% for the corresponding quarter ended March 31, 2018. Total provisions were rupees 1,889.2 crore for the current quarter as against 1,541.1 crore for the corresponding quarter in the previous year. Profit before tax for the quarter ended March 31, 2019 was up 22.8% to rupees 8,954.4 crore. Net profit for the quarter grew by 22.6% to Rs 5,885.1 crore. Moving on to results for the year ended March 31, 2019. The bank earned a total income of Rs 1,16,597.9 crore as against Rs 95,461.7 crore in the previous year. Net revenues grew to Rs 65,869.1 crore as against Rs. 55,315.2 crore. Core net interest margin stood at 4.3%, and core cost-to-income ratio stood at 39.9%. Net profit for the year ended March 31, 2019 was at Rs. 21,078.1 crore, up 20.5% over the corresponding year ended March 31, 2018. Now for some balance sheet items. The bank's balance sheet size as of March 31, 2019 was Rs. 12,44,541 crore as against Rs. 10,63,934 crore as of March 31, 2018. Total deposits as of March 31, 2019 amounted to Rs. 9,23,141 crore, an increase of 17% over March 31, 2018. CASA deposits grew at 14%. Savings account deposits were at Rs. 2,48,700 crore and current account deposits were at Rs. 1,42,498 crore. Time deposits at Rs. 5,31,943 crore grew by 19.4% over previous year. CASA deposits comprised 42.4% of total deposits as of March 31, 2019. The bank's continuing focus on deposits helped in the maintenance of a healthy liquidity coverage ratio at 118%, well above the regulatory requirement. Total advances as of March 31, 2019 were rupees 8,19,401 crore. Domestic advances grew by 24.6% over the March 31, 2018 period. The domestic loan mix as per Basel II classification between retail and wholesale was retail 54%, wholesale 46%. Overseas advances constituted 3% of total advances. Coming to CAPAD network and asset quality, with regards to capital adequacy, total capital adequacy ratio as per Basel III guidelines stood at 17.1% as against a regulatory requirement of 11.025%. Tier 1 capital adequacy ratio was 15.8% compared to 13.2% in the previous year. As of March 31, 2019, The bank's distribution network was at 5,103 branch outlets and 13,160 ATMs across 2,748 cities and towns. 53% of the branches are in semi-urban and rural areas. Number of employees increased to 98,061 as of March 31, 2019. On the asset quality front, gross NPAs were 1.36%, as against 1.38% as of December 31, 2018, and as against 1.30 as of March 31, 2018. The coverage stood at 71%. Net NPAs were 0.4% as on March 31, 2019. The bank held floating provisions of 1,451 crore as on March 31, 2019. The provisions, which comprises specific provisions, general provisions, and floating provisions, where 117% of the gross non-performing loans as on March 31, 2019. Subsidiary summary results now. The financial results of the bank subsidiary companies have been prepared in accordance with notified Indian accounting standards, NDIS, with effect from April 1, 2018. April 1, 2017 being the transition date. The financial results for the comparative reporting period have also been prepared in accordance therewith. HDFC Securities Limited's total income was Rs. 782.1 crore as against 800.1 crore for the year ended March 31, 2018. Net profit for the year was Rs. 329.8 crore against Rs. 344.7 crore in the previous year. Total number of branches are 278 across 165 cities. Net profit for the year was Rs. 1,153.2 crore compared to Rs. 933 crore, registering a growth of 23.6%. HDB FSL had 1,350 branches across 981 cities. Growth-impaired loans were at 1.8% of gross loans and net-impaired loans were at 1.3% of net loans. Total capital adequacy ratio was at 17.9%, with the Tier 1 capital adequacy ratio at 12.8%. In closing, the consolidated results. Kindly note the bank's consolidated financial results include financial information of the subsidy companies based on the recognition and measurement principles as per Indian GAAP. Bank's consolidated net profit for the year ended March 31, 2019 was Rs. 22,332.4 crore, up 20.7% over previous year. Consolidated advances grew by 24.2% from 7,34,000 as on March 31, 2018 to 8,69,223 as on March 31, 2019. Now with that, hand this back to the operator to open it up.

Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to ask questions relevant to the financial results. Participants are also requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Abhishek Modi from Asit C. Mehta. Please go ahead. Hello.