HDFC Bank, the second largest private sector lender, today said its net profit for the quarter ended December 31, 2012 increased by 30% from a year ago to Rs 1,859 crore.
It was the 53rd consecutive quarter of 30% or more year-on-year growth in the bank's quarterly net profit, according to an analyst estimate.
Strong growth in retail advances, stable net interest margin and higher fee income aided the bank's earnings during October-December quarter.
Net interest income, or the difference between interest income and interest expense, grew by 22% from a year earlier to Rs 3,799 crore. Net interest margin was at 4.1%. While it was unchanged from the corresponding period last year, margin narrowed by 10 basis points sequentially.
"The performance reflects continued execution of our strategy of balanced margin and stable asset quality," Paresh Sukthankar, executive director at HDFC Bank, said in his post-earnings comments.
He expects the bank's margin to remain in the range of 3.9-4.2% in the coming quarters. HDFC Bank's net interest margin has stayed in that range for over five years now.
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Fee income increased by 24.3% year-on-year during the quarter and contributed towards 26.7% rise in the bank's other income. The core cost-to-income ratio was at 47.1% at the end of December, 2012.
Provisions narrowed from a year ago to Rs 307 crore but inched up sequentially due to slippages in commercial vehicle and construction equipment loans. The provision coverage ratio was at 80%.
Gross non-performing asset ratio improved by 3 basis points from a year ago but deteriorated by 9 basis points sequentially to 1%. Net bad loan ratio was unchanged at 0.2%. Retail loans accounted for almost 80% of the fresh additions in the bank's gross bad loans during the quarter.
Sukthankar, however, clarified that asset quality continues to remain healthy and there are no signs of stress in the lender's retail or wholesale loan portfolios. Total restructured loans were 0.3% of gross advances.
Net advances expanded by 24.3% year-on-year to Rs 241,493 crore at the end of December, 2012. Retail loan growth outpaced the rise in corporate credit. While retail loans increased by 28% from a year earlier, corporate loans grew by 18.5%. The mix of loans between retail and wholesale segments was 53:47 at the end of the quarter.
Total deposits increased by 22% from a year ago to Rs 284,119 crore. Share of low-cost current account savings account (CASA) deposits was 45.4%.
HDFC Bank closed the quarter with a capital adequacy ratio of 17%.
"Asset quality showed some spike. The rise is not alarming looking at relative percentage of gross and net non-performing assets," broking firm Emkay Global Financial Services said in a note to clients on the bank's third quarter earnings.
HDFC Bank shares today closed at Rs 659 on the National Stock Exchange (NSE), down 1.2% from previous close.