HDFC Bank net rises 45% to Rs 429 cr

HDFC Bank, the second largest private sector bank in the country, posted a 45.2 per cent increase in net profit to Rs 429.36 crore in the quarter ended December 31, 2007 from a year earlier, driven by a strong balance sheet and assets growth.

"The growth in balance sheet, loans and deposits, fees and commissions led to a surge in profits. Margins have also improved on account of growth in current account savings account (CASA) and impact of capital raising. We have grown faster than the industry in some quarters. There has been no change in our core growth strategy. There was an opportunity and we cashed on it. Whenever we see the opportunity, we will grow faster. The market has slowed down. The competition is now less based on price and more dependant on service quality turnaround time. Banks with a similar focus are at an advantage,'' said Paresh Sukthankar, executive director, HDFC Bank.

The bank's total income for the quarter ended December 31, 2007, grew by 64.4 per cent to Rs 3,405.8 crore, compared with Rs 2,072.23 crore in the corresponding quarter last year. Other income witnessed a strong growth of 81.9 per cent to Rs 678.9 crore from Rs 373.3 crore for the quarter ended December 31, 2006. 
 

(Rs crore)	Quarter ended December
	2006	2007	% chg
Interest earned	1759.31	2726.90	55.00
Other income	373.30	678.89	81.86
Expenditure	1435.70	2339.44	62.95
PBT	696.91	1066.35	53.01
Net profit	295.64	429.36	45.23
CAR (%)	12.80	13.80
NP (%)	16.80	15.75
Source: BSE

The main contributor to other income were fees and commissions amounting to Rs 460.1 crore, up 38.8 per cent.

The two other major components of other income were foreign exchange/derivatives revenues of Rs 74.2 crore and profit and loss on revaluation or sale of investments, worth Rs 131.5 crore. Net interest margin stood at 4.3 per cent.

"Our retail and corporate books have seen a healthy growth. Within the retail space, there has been a growth in business banking, personal loans, auto loans and credit cards. We will continue to see healthy growth in corporate and retail banking,'' added Sukthankar.

The deposit base grew by 48.9 per cent to Rs 99,387 crore, including savings account deposits of Rs 24,961 crore and current account deposits at Rs.25,602 crore.

The CASA mix stood at around 50.9 per cent of total deposits at the end of December 31, 2007. Net advances in the third quarter of 2008 grew by 48.7 per cent to Rs 71,387 crore. The retail loans grew by 45 per cent on a year-on-year basis and now form 52.6 per cent of gross advances.

Provisions and contingencies for the quarter increased to Rs 423.1 crore against Rs 206 crore in the corresponding quarter last year, largely on account of provisions made for non-performing assets and general provisions for standard assets, of Rs 350.1 crore.

The bank's net non performing assets stood at 0.4 per cent and its capital adequacy ratio was 13.8 per cent, as on December 31, 2007.