For HDFC Bank, the fiscal year 2022-23 was a very important year that saw the merger of HDFC with HDFC Bank. The merger came through July 1, 2023. "A bigger balance sheet post-merger will enable HDFC Bank to take a larger exposure in infrastructure projects. This means we can participate more meaningfully in India's growth story and contribute to nation building," S. Jagdishan, Managing Director and Chief Executive Officer, HDFC Bank explained addressing the shareholders.
Building Communities
Empowering less privileged communities is a key priority for the bank that has helped it climb rankings in this perception-based rankings. Through HDFC Bank Parivartan, it seeks to drive sustainable and holistic development that can truly make a difference in people's lives. In FY23, the bank reportedly reached 9.93 crore CSR beneficiaries. It had its CSR projects implemented across 27 states. It covered 3,399 villages under its Holistic Rural Development Programme (HRDP). "In FY 2022-23, around 500 projects were executed through 250+ implementation partners spread across 27 states of the country. The impact of our projects is tracked internally and externally through impact assessment studies," Jagdishan informed the shareholders.
By aligning the CSR focus areas with the Sustainable Development Goals (SDGs), the bank creates a meaningful impact that fosters resilient and thriving communities. It has five focus areas- rural development, promotion of education, skill development and livelihood enhancement, healthcare and hygiene and financial literacy and inclusion. Away from the core banking business, HDFC Bank is also engaged in working diligently to increase the cultivable land pan-India. Its target is to bring 1 lakh acres of uncultivated land under cultivation augmented by bringing 2 lakh acres of unirrigated land under irrigation and
1 lakh acre of land under cultivation by FY25.
Strong Performance
In FY23, the banks' balance sheet grew 19.2 per cent to Rs 24,66,081 crore and net profit increased 19.3 per cent to Rs 44,108.7 crore. Net Interest Income increased 20.6 per cent to Rs 86,842.2 crore. GNPA decreased to 1.12 per cent from 1.17 per cent.
In the fiscal under review, the cost-to-income ratio of the bank increased 3.5 per cent over the previous year to stand at 40.4 per cent for FY23. This was due to an increase in operating expenses by 27.3 per cent over the previous year and the increase was largely attributable to continued focus on expanding its network. The bank added 1,479 branches in FY23. The cost-to-income ratio serves as a key performance indicator for banks, providing valuable insights into their operational efficiency, profitability, competitiveness, and financial health. Maintaining a low and stable ratio is crucial for long-term sustainability and success in the banking industry, experts say.
Looking ahead, the bank believes that its 10 strategic pillars will continue to drive growth. For HDFC Bank, the medium-term goal (2 years) is to have a presence in 711 districts compared to 697 in March 2023. It also wants to reach 6,000 cities/ towns from 4,080 in March 2023.
