Rise aided by 22% NII growth, retail segment pushes gross NPAs up by R298 crore
HDFC Bank on Friday reported a 30% year-on-year rise in net profit of R1,859 crore for the quarter ended December 31. The increase in net profit was aided by a healthy growth in net interest income, which grew 22% y-o-y to R3,799 crore on the back of advances, which grew 24.3% y-o-y.
India’s second largest private sector lender, reported an operating profit in the October-December period higher by 27% over the corresponding period in 2011 to R3,023.63 crore.
The HDFC Bank stock closed at R659 per share on the Bombay Stock Exchange on Friday, down 1.18% from the previous close. Net interest margin in the quarter fell 10 basis points (bps) sequentially to 4.1%, the bank reported. “We have maintained that our margins will be in the range of 3.9 to 4.2% and they will continue to oscillate in that range,” said Paresh Sukhtankar, the executive director at HDFC Bank.
The bank reported higher gross non-performing assets (NPAs) at R2,432.21 crore, about R298 crore higher than the preceding quarter. Nearly 80% of these incremental bad loans came from bank’s retail segment and particularly from the commercial vehicle and commercial equipment side, Sukhtankar said, while talking to reporters after presenting the bank’s results.
Gross NPAs as a ratio of total assets stood at 1%, increasing by about 10 bps sequentially. Net NPAs remained unchanged at 0.2%. NPA coverage ratio based on specific provisions (not including write-offs, technical or otherwise) was at 80% as on December 31, HDFC Bank said in a statement. The total restructured book at the end of December stands at R685 crore, Sukhtankar said, adding HDFC Bank restructured about R11 crore worth of loans during the quarter. He expects the bank’s asset quality to hold at current levels going ahead.
Other income or the non-interest revenue rose 27% y-o-y to R1,799 crore. The main contributor to other income was fees & commissions of R1,401.9 crore, up 24.3% y-o-y. Total income for the bank stood at R10,506.5 crore, up 22% from last year. Ratio between advances towards retail and wholesale segment for the bank stood at 53:47 during the quarter. Retail advances constitute 51.3% of the total advances in the corresponding quarter last year. Total retail assets during the three month period rose 29.5% y-o-y to R1,29,958 crore.
Total deposits were at R2,84,119 crore, a rise of 22.2% over the corresponding quarter last year. Savings deposit grew 16.5% y-o-y to R81,942 crore and current deposits grew 10.4% to R47,004 crore. Current account savings account ratio as at December 31 was 45.4%, the bank said.