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BW Businessworld

HDFC Bank: A Gentleman’s Third

The stress on size places HDFC Bank at No. 3, but it’s first class all the way

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And then you have HDFC Bank. The country’s most “on-podium” bank continued to grow even in a sluggish credit market. On a consolidated basis, total assets grew by 17.07 per cent in fiscal’17 to Rs 8,92,344.16 crore; total income by 15.83 per cent to Rs 86,148.99 crore. It figures third in the BW Real 500 financial services firms for fiscal 2017 — in the main because its book size is smaller than State Bank of India, and ICICI Bank.

On a standalone basis, at end-March, the bank’s balance sheet size stood at Rs 8,63,840 crore, up by 16.6 per cent from the preceding fiscal’s Rs 7,40,796 crore. Total deposits increased by 17.8 per cent to Rs 6,43,640 crore (Rs 5,46,424 crore) while advances grew by 19.4 per cent to Rs 5,54,568 crore. The bank’s profit before tax grew by 18.8 per cent to Rs 22,139.1 crore; net profit was up 18.3 per cent to Rs 14,549.7 crore. Return on average net worth was 18 per cent while the basic earnings per share was Rs 57.20, up from Rs 48.80.

HDFC Bank’s total retail deposits grew by 17.7 per cent to Rs 5,06,843 crore on the back of a higher than usual current and savings account which, thanks to demonetisation, grew at 32.9 per cent. Auto, personal loans and plastic accounted for a bulk of the retail business revenues. Retail advances grew by 18.9 per cent to Rs 2,95,161 crore. It added 195 branches taking its network to 4,715; the number of ATMs increased to 12,000 (from 11,260); the customer base grew to 4.05 crore (from 3.77 crore) with a continued focus on semi-urban and rural markets that accounted for more than 52 per cent of its branches.

On the wholesale banking side, it grew 20.1 per cent, the loan book stood at Rs 2,63,000 crore constituting 47 per cent of the bank’s total book. So too, mid-market segment, which recorded a 34 per cent growth in asset size to cross Rs 65,000 crore. In government business, the bank’s focus on tax collections continued to gather pace — the direct tax collected was about Rs 2.16 lakh crore and indirect tax at Rs 1.19 lakh crore.

The bank’s managing director Aditya Puri is on record that “there is nothing related to financial services — whether we manufacture it ourselves or deliver it otherwise — that we will not deliver to you in a manner convenient to you at the best price with the trust that’s backed by HDFC Bank”. The essence of it: as a customer, when you go to a HDFC Bank’s counter, you will get what you need or aspire to; the bank is agnostic (at one level) as to whether the product or service sought is picked off its own rack or not. The bank now answers to a profile that Puri sums up as ‘Think Money, Think HDFC Bank’.

The bank believes financial inclusion will pivot on ‘Aadhaar’ where every bank mitra (business correspondent) is equipped with Aadhaar and e-KYC enabled micro-ATMs. The micro-ATMs allow customers to effectively action basic banking activities using the “power of the thumb”. At end-March, HDFC Bank had opened 17.33 lakh PMJDY accounts (since inception). The bank firmly believes in the importance of Aadhaar-linked accounts, particularly in the scenario of direct benefit transfers (DBT), and has pledged to educate and inform its customers on the same.

The bank’s motto is, ‘Bank aapki mutthi mein’ . The complaint, if any, is people can’t get enough of  HDFC Bank!