Loan growth drives HDFC Bank’s net

By: | Published: April 23, 2016 6:12 AM

Lender posts 20% Y-o-Y rise in net profit for the March quarter to Rs 3,374 crore

HDFC Bank on Friday reported a 20% year-on-year rise in its net profit for the March quarter to R3,374.22 crore because of increased demand for loans from retail and wholesale segments.

The bank’s total income for the quarter stood at R18,862.61 crore, 21% higher than the year-ago period. Net interest income, which is the difference between interest earned and interest expended, came in at R7,453.30 crore, against R6,013.20 crore last year.

The retail segment, which consists of products such as home loans, car loans, commercial vehicle loans and credit cards, among other things, grew by close to 30%, compared to the same period last year.

The wholesale segment rose by over 27%. The retail-wholesale mix at the end of the quarter stood at 51:49.

“Obviously we have gained market share in the wholesale business, which has meant a larger share of the existing customers on the corporate banking side and adding some new customers on the emerging corporates side and the business banking side, on the wholesale front. And on the retail front, actually, almost every product has shown growth,” Paresh Sukthankar, deputy managing director at HDFC Bank, said in a post-results conference call.

The private sector lender’s net interest margin, which was 4.4% in the March quarter last year, deteriorated by 10 basis points to 4.3%. Other income, which is non-interest revenue, rose by 12% year-on-year to R2,865.90 crore.

In the quarter under review, HDFC Bank saw its provisions rise to R662.50 crore as against R576.70 crore in the corresponding quarter a year ago.

Speaking about why provisions rose, Sukthankar said that it was primarily due to the rise in general provisions for standard assets. “Because the loan book has grown substantially on a sequential basis, the general provisions for standard assets has seen a fairly high growth. In fact, we made general provisions of around Rs 161 crore. Last year, this was around Rs 118 crore,” he said.

On the asset quality front, the bank did not see much change year-on-year. The gross non-performing assets (NPA) as a percentage of total advances stood at 0.94% as against 0.93% last year, while the net NPA rose by 3 basis points over the same period to 0.28%.

HDFC Bank’s total advances as on March 31 stood at R4.64 lakh crore, 27% higher than the same period last year. Deposits grew at healthy pace too, registering a rise of 21% year-on-year to R5.46 lakh crore.

At the end of the quarter, current accounts and savings accounts accounted for 43% of the bank’s total deposits.

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