A tight control over its loan book and a steep rise in other income helped HDFC Bank report a 30.5% rise in net profit for the first quarter. The new generation bank earned a net profit of Rs 606.1 crore during the April-June quarter, just enough to uphold its tradition of posting 30%-plus growth in net profits.
The bank?s operating profit for the quarter grew by 47.8% to Rs 1,518.7 crore year-on-year. It set aside Rs 658.8 crore for provisions & contingencies and Rs 253.7 crore for taxation for the quarter.
The bank?s gross advances at Rs 105,288 crore were higher by 7.7% over the year-ago quarter and 5% over the preceding quarter. Its net interest income (interest earned minus interest expended) of Rs 1,855.6 crore was driven by an average asset growth of 10.5% and a net interest margin (NIM) of 4.1%.
The bank?s other income (non-interest revenue) climbed a steep 75.9%, from Rs 593.4 crore a year ago to Rs 1,043.7 crore in the latest quarter.
The largest contributor to the ?other income? head was fees & commissions of Rs 649.3 crore, up 27% year-on-year. Two other major components of ?other income? were foreign exchange/derivatives revenues of Rs 137.8 crore and profit/(loss) on revaluation/sale of investments of Rs 256 crore, as against Rs 157.4 crore and Rs (77.6) crore in the first quarter of 2009 , respectively.
Interest earned (net of loan origination costs and amortisation of premia on investments held in the held-to-maturity category) increased from Rs 3,621.7 crore a yewr ago to Rs 4,093.1crore in Q1 ?10.
The bank?s balance sheet size increased by Rs 17,516.4 crore and touched Rs 186,115 crore in the quarter.
During the quarter, a portion of the bank?s surplus liquidity was parked in short-term money market instruments and liquid mutual funds. Interest income earned from this was mostly tax-free. Adjusted for the corresponding offset of a lower tax rate, NIM was stable at around 4.2%.
The bank?s portfolio quality as of June 30, 2009 remained healthy with gross non-performing assets at 2.1% of gross advances, and net non-performing assets at 0.6% of net advances.
Total restructured assets, including applications received for loan restructuring, which were yet to be approved or implemented, were 0.55% of the bank?s gross advances as of June 30, 2009. Of this, amounts categorised as standard assets were 0.19% of gross advances.
The bank?s total capital adequacy ratio, computed to Basel-2 guidelines, was a high 15.4%, against the regulatory minimum of 9%. Tier-I CAR was at 10.6%.
Total deposits were Rs 145,732 crore, up from Rs 130,918 crore as of June 30, 2008. With Savings account deposits at Rs 38,489 crore and current account deposits at Rs 27,026 crore, the CASA mix was at 45% of total deposits. Retail loans at Rs 61,130 crore were 58.1% of gross advances.