HDFC Bank Q3 net up 20% on core interest earnings

By: | Updated: February 15, 2015 11:58 AM

Private lender HDFC Bank reported 20% higher third-quarter profit as its net interest income rose 23% year-on-year.

Private lender HDFC Bank reported 20% higher third-quarter profit as its net interest income rose 23% year-on-year. The bank reported a net profit of R2,794.51 crore for the quarter ended December 31, compared with R2,325.7 crore reported in the year-ago quarter. Net interest income for the quarter stood at R5,699.9 crore.

Asset quality remained unchanged with gross and net non-performing assets (NPA) ratios constant, sequentially as well as compared with the year-ago quarter. Non-interest income, which constituted nearly 31% of net revenue, stood at R2,534.9 crore, a rise of 18% year-on-year (y-o-y). Provisions increased 44% y-o-y to R560.4 crore.

While total deposits rose 18.6% to R414,128 crore, advances for the quarter ended December 31 rose 17% y-o-y to R347,088 crore. “Growth rate is linked to how market conditions are and therefore in many ways it is linked to how the economy does. If you look at the system growth numbers, advances were around 10.3% and deposit was in the 10-11% range. So, with the current growth rate of 17-18% between advances and deposits, we have been outpacing the system significantly,” Paresh Sukthankar, executive director of HDFC Bank, told reporter during a conference call on Saturday.

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“Growth from here is predicated on what happens to the real GDP and how that translates to demand for bank credit and deposits in the banking system,” Sukthankar added. “We remain comfortable that we will continue to outpace the system. So I am not looking at a huge expansion in the delta growth we achieved over the system growth in this quarter. We do believe the the system loan and deposit growth should pickup in the next few quarters,” he added.

Sukthankar said that the bank will consider re-calibrating its base rate before March-end depending on the trend in deposit rates.

HDFC Bank, whose loan book is tilted in favour of retail advances, posted a 5% increase quarter-on-quarter (q-o-q) in its wholesale and retail banking revenue to R5,936.76 crore and R12,560.12 crore, respectively.

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