The bank's total income grew by 33 per cent to Rs 93.15 crore compared with Rs 70.11 crore during the first quarter of the last financial year. On the expense side, however, interest expenses have gone up sharply from Rs 27.94 crore to Rs 41.16 crore, largely on account of the high cost certificates of deposit (CDs) and other short-term deposits contracted during January, 1998, when the Reserve Bank ushered in a tight money regime to rein in the falling rupee.

Interest costs also went up on account of the cost of servicing of the Rs 100-crore tier-II capital raised during the year to boost the capital adequacy ratio from 13 per cent as on March 31, 1997, to 13.92 per cent as on March 31, 1998. The bank raised the money through an issue of unsecured,redeemable, sub-ordinated bonds at a coupon rate of 13 per cent.

Speculative favourite HDFC Bank scrip shot up by 8 per cent on the NSE to be locked at the upper end of the price band at Rs 68.20. However, profit-booking towards the end saw the stock close at Rs 67.05, registering a net gain of 6.18 per cent.

On the BSE, the stock closed at Rs 67.15, witnessing a sharp recovery of 6 per cent over Friday's close. Announcing the Q1 results at the bank's fourth annual general meeting, Shobha Singh Thakur, chairman of the bank, said that HDFC Bank's growth in the future years would come primarily through geographic expansion, increased penetration, expanding the product range and by proactively identifying and exploiting market opportunities. During the current year, HDFC Bank plans to launch a debit card to expand the range of its retail products. The bank has also lined up plans to expand its branch network to 60 branches from 37 currently by March, 1999.