HDFC Annual Report 2015 16
HDFC Annual Report 2015 16
HDFC Annual Report 2015 16
Net Profit:
` 12,296 crore. An increase of 20.4%
compared to the previous year
Total Deposits:
` 546,424 crore. An increase of 21.2%
compared to the previous year
Total Advances:
` 464,594 crore. An increase of 27.1%
compared to the previous year
Network:
- Branches: 4,520
- ATMs: 12,000
- Cities/Towns: 2,587
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BANKING
BHARAT
Financial Highlights
2006-2007
2007-2008
2008-2009
Interest income
7,055.35
10,530.43
16,584.01
Interest expense
3,179.45
4,887.12
8,911.10
3,875.90
5,643.31
7,672.91
Other income
1,679.21
2,495.94
3,700.65
Net revenues
5,555.11
8,139.25
11,373.56
Operating costs
2,975.08
4,311.03
5,950.54
Operating result
2,580.03
3,828.22
5,423.02
941.28
1,547.59
2,123.78
877.13
1,278.84
1,970.35
64.15
268.75
153.43
1,638.75
2,280.63
3,299.24
497.30
690.45
1,054.31
1,141.45
1,590.18
2,244.93
68,297.94
100,768.60
142,811.58
Subordinated debt
3,282.60
3,249.10
8,738.58
Stockholders equity
6,433.15
11,497.23
14,646.33
Working funds
91,235.61
133,176.60
183,270.77
Loans
46,944.78
63,426.90
98,883.05
Investments #
30,281.96
48,908.96
55,784.95
7.26
9.24
10.57
19.40%
16.05%
16.12%
8.58%
10.30%
10.58%
13.08%
13.60%
15.69%
1.40
1.70
2.00
22.92%
22.17%
22.17%
40.28
64.88
68.86
190.83
266.25
194.68
26.29
28.80
18.42
Others
Prot before tax
Provision for taxation
Prot after tax
Funds :
Deposits
Key Ratios :
Earnings per share (`) *
Return on average networth
1 Crore = ` 10 Million
Figures for the years prior to 2011-2012 have been adjusted to reect the effect of split of equity shares from nominal value of ` 10 each into
ve equity shares of nominal value of ` 2 each.
** Source : NSE (prices for years prior to 2011-2012 have been divided by ve to reect the sub-division of shares)
*** Proposed
#
Figures for the previous years have been adjusted to reect the effect of reclassication as mentioned in Schedule 18, Note no. 1 forming
part of Notes to Accounts.
12
(` crore)
2009-2010
2010-2011
2011-2012
2012-2013
2013-2014
2014-2015
2015-2016
16,467.92
20,380.77
27,874.19
35,064.87
41,135.53
48,469.91
60,221.45
7,786.30
9,385.08
14,989.58
19,253.75
22,652.90
26,074.23
32,629.93
8,681.62
10,995.69
12,884.61
15,811.12
18,482.63
22,395.68
27,591.52
4,573.63
4,945.23
5,783.62
6,852.62
7,919.64
8,996.34
10,751.72
13,255.25
15,940.92
18,668.23
22,663.74
26,402.28
31,392.02
38,343.24
6,475.71
7,780.02
9,277.64
11,236.11
12,042.20
13,987.55
16,979.69
6,779.54
8,160.90
9,390.59
11,427.63
14,360.08
17,404.47
21,363.55
2,490.40
2,342.24
1,877.44
1,677.01
1,588.03
2,075.75
2,725.61
2,288.74
1,198.55
1,091.77
1,234.21
1,632.58
1,723.58
2,133.63
201.66
1,143.69
785.67
442.80
(44.56)
352.17
591.98
4,289.14
5,818.66
7,513.15
9,750.62
12,772.05
15,328.72
18,637.94
1,340.44
1,892.26
2,346.08
3,024.34
4,293.67
5,112.80
6,341.71
2,948.70
3,926.40
5,167.07
6,726.28
8,478.38
10,215.92
12,296.23
167,404.44
208,586.41
246,706.45
296,246.98
367,337.48
450,795.65
546,424.19
6,353.10
7,393.05
11,105.65
16,586.75
16,643.05
16,254.90
15,090.45
21,519.58
25,376.35
29,924.37
36,214.15
43,478.63
62,009.42
72,677.77
222,458.57
277,352.59
337,909.50
400,331.90
491,599.50
590,503.08
708,845.57
125,830.59
159,982.67
195,420.03
239,720.64
303,000.27
365,495.04
464,593.96
53,113.32
61,670.94
84,728.34
97,342.80
105,831.88
151,641.77
163,885.78
13.51
17.00
22.11
28.49
35.47
42.15
48.84
16.80%
16.52%
18.37%
20.07%
20.88%
20.36%
17.97%
13.26%
12.23%
11.60%
11.08%
11.77%
13.66%
13.22%
17.44%
16.22%
16.52%
16.80%
16.07%
16.79%
15.53%
2.40
3.30
4.30
5.50
6.85
8.00
21.72%
22.72%
22.70%
22.77%
22.68%
23.62%
23.51%
94.02
109.09
127.52
152.20
181.23
247.39
287.47
386.70
469.17
519.85
625.35
748.80
1,022.70
1,071.15
28.62
27.59
23.51
21.95
21.11
24.26
21.93
13
9.50 ***
BOARD OF DIRECTORS
STATUTORY AUDITORS
REGISTERED OFFICE
CORPORATE IDENTIFICATION NO
CIN - L65920MH1994PLC080618
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Contents
Directors Report
16 - 62
65 - 67
Financial Statements
Basel III - Pillar 3 Disclosures
141
142 - 145
146 - 194
68 - 140
195
Corporate Governance
196 - 212
Shareholder Information
213 - 215
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Directors' Report
To the Members,
Introduction:
Your Directors take great pleasure in presenting the 22nd Annual Report on the business and operations of your Bank, together with
the audited accounts for the year ended March 31, 2016.
Its been a transformational year for your Bank in more ways than one. Led by a slew of digital innovations, many of them pioneering
and several initiatives in rural India, your Bank was able to cement its position as a premier Bank across markets, from metros
to the hinterland. The Banks singular endeavour to offer an agnostic customer experience across all its geographies has enabled
it to garner not just substantial mindshare but also market share.
Your Bank has also contributed as a corporate citizen substantially through its Sustainable Livelihood Initiative, which skills those
at the Bottom of the Pyramid and enables them to earn a livelihood by providing captial and in the process substituting usurious
lending by the unorganized nancial sector. Through its CSR programme, your Bank is helping create sustainable communities.
These initiatives helped the larger society bond better with the Bank. They were also instrumental in establishing your Bank
as Indias Most Valuable Brand for the 2nd consecutive year in a study conducted by Millward Brown, a leading global research agency
specializing in media and brand equity research and a part of communications group WPP.
While the Banks operations complemented by new initiatives during the year led to higher revenues and protability, its traditional
prudence ensured that it did not come at the cost of asset quality.
599,442.7
496,009.2
Advances
464,594.0
365,495.0
Total Income
70,973.2
57,466.3
19,343.8
15,985.0
12,296.2
10,215.9
18,627.8
14,654.2
30,924.0
24,870.1
3,074.1
2,554.0
1,229.6
1,021.6
222.2
224.9
(8.5)
27.5
2,401.8
2,005.2
488.9
408.2
Dividend (including tax / cess thereon) pertaining to previous year paid during the year,
net of dividend tax credits
(11.7)
0.8
23,527.6
18,627.8
Appropriations
The Bank posted total income and net profit of ` 70,973.2 crore and ` 12,296.2 crore respectively for the year ended
March 31, 2016 as against ` 57,466.3 crore and ` 10,215.9 crore respectively for the year ended March 31, 2015.
Appropriations from net prot have been effected as per the table given above.
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Directors' Report
Dividend
Your Bank has had a dividend policy that balances the dual objectives of appropriately rewarding shareholders through dividends
and retaining capital in order to maintain a healthy capital adequacy ratio to support future growth. It has had a consistent track record
of steady increase in dividend distribution over its history with the dividend pay-out ratio ranging between 20-25 per cent. Consistent
with this policy and in recognition of the overall performance during this nancial year, your Directors are pleased to recommend
a dividend of ` 9.50 per equity share of ` 2 for the year ended March 31, 2016 as against ` 8 per equity share of ` 2 for the year
ended March 31, 2015. This dividend shall be subject to tax on dividend to be paid by the Bank.
Ratings
Instrument
Rating
Fixed Deposit
Programme
IND Taaa
India Ratings
CARE A1+
CARE Ratings
IND A1+
India Ratings
CARE AAA
CARE Ratings
IND AAA
India Ratings
CARE Ratings
CRISIL AAA
CRISIL
CARE AAA
CARE Ratings
CRISIL AAA
CRISIL
CARE AAA
CARE Ratings
CRISIL AAA
CRISIL
Certicate of Deposits
Programme
Infrastructure Bonds
Rating Agency
Comments
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Directors' Report
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Directors' Report
Retail Banking
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Directors' Report
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Directors' Report
s 4HE CRITICAL WEBSITES OF THE "ANK ARE SCANNED AND MONITORED
continuously for early detection of any malware
A testimony to the Banks crisis preparedness is that it has
secured PCI DSS and ISO 27001 certication for its critical
information assets. Its efforts have been further recognized
through awards from IDRBT, Data Security Council of
India-National Association of Software and Services Companies
(NASSCOM) for various cyber security initiatives.
Service Quality Initiatives
A regular process of reviewing the service levels and capturing
feedback from customers is undertaken for continuous
improvement in product, processes and service levels.
This has gained even more criticality as the customer can now
access the Banks services across traditional touch points like
branches, ATMs as well as the digital ones like the Internet and
Mobile. Thanks to the new digital products on offer from the
Bank - constantly monitoring the customer experience, securing
feedback and acting on it becomes even more imperative. Your
Bank has therefore augmented the training and skill development
mechanism to empower and equip employees to deliver improved
quality of Customer Service, as well as put in place a more
stringent grievance monitoring and redressal mechanism across
different delivery channels. The effectiveness of these measures
is reviewed periodically at different levels including the Board of
Directors. All these initiatives have helped in consistent reduction
in total number of customer complaints. It is also a testimony to
the Banks strong and objective review mechanism. These are
done by an independent cross functional team of senior staff to
ensure unbiased resolution. In addition to the aforementioned
measures, in compliance with Regulatory guidelines, your Bank
has appointed a senior retired banker as Chief Customer Service
Ofcer (Internal Ombudsman) who heads the review mechanism.
As a result of the continued focus on customer service, your
Bank has received written appreciation from many of the Banking
Ombudsmen appointed by Reserve Bank of India across locations
such as Andhra Pradesh, Chhattisgarh, Goa, Gujarat, Haryana,
Madhya Pradesh, Maharashtra, Punjab, Sikkim, Uttarakhand,
Uttar Pradesh and West Bengal.
Risk Management and Portfolio Quality
Integral to its business, the Bank takes on various types of risk,
the most important of which are credit risk, market risk, liquidity
risk and operational risk. The identication, measurement,
monitoring and management of risks remain a key focus
area for the Bank. Sound risk management and balancing
risk-reward trade-offs are critical to the Banks success. Business
and revenue growth are therefore to be weighed in the context
of the risks implicit in the Banks business strategy. The Board
of Directors of your Bank endorses the risk strategy and approves
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Directors' Report
the risk policies. The Risk Policy and Monitoring Committee of the
Board supervises implementation of the risk strategy. It guides the
development of policies, procedures and systems for managing
risk. The committee periodically reviews risk level and direction,
portfolio composition, status of impaired credits as well as limits
for treasury operations.
To manage credit risk, the Bank has a comprehensive centralized
risk management function, independent from the operations and
business units of the Bank. Distinct policies, processes and systems
are in place for the retail and wholesale lending businesses.
In the retail loan businesses, the credit cycle is managed through
appropriate front-end credit, operational and collection processes.
For each product, programmes dening customer segments,
underwriting standards and security structure are specied to
ensure consistency of credit buying patterns. Given the granularity
of individual exposures, retail credit risk is monitored largely on a
portfolio basis, across various products and customer segments.
For wholesale credit exposures, management of credit risk is
done through target market denition, appropriate credit approval
processes, ongoing post-disbursement monitoring and remedial
management procedures. Overall portfolio diversication,
prudential ceilings across various dimensions (individual/
borrower group, industry, credit risk rating grades, and country),
product mix, security structures and periodic as well as proactive
reviews facilitate risk mitigation and management.
The asset quality of the Indian banking industry came under
severe pressure during the year due to broader macroeconomic
factors as well as issues specic to certain sectors in the
economy. The banking industry on a collective basis saw
a sharp spike in non-performing assets as also exible structuring
of loans under the RBI framework. Your Bank did not witness any
signicant deterioration in overall asset quality and continues
to maintain the highest standards of governance in respect
of recognition and provisioning of non-performing loans.
During the year ended March 31, 2016, your Banks ratio
of gross non-performing assets (NPAs) to gross advances was
0.9 per cent. Net non-performing assets (gross non-performing
assets less specic loan loss provisions) were 0.3 per cent of
net advances as of March 31, 2016. Total restructured assets
(including applications under process for restructuring)
were 0.1 per cent of gross advances as of March 31, 2016.
The specic loan loss provisions that the Bank has made for its
non-performing assets continue to be more conservative than
the regulatory requirements. In addition, the Bank has made
general provisions for standard assets which are as per the
regulatory prescription. The coverage ratio taking into account
specic, general and oating provisions was 146 per cent as of
March 31, 2016.
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Directors' Report