HDFC Bank Q4 net profit growth slowest in a decade

NEW DELHI (Reuters) - HDFC Bank Ltd, India's third-biggest lender by assets, said its quarterly net profit rose 23 percent, the slowest growth in a more than a decade and slightly lower than estimates, as a weaker economy put the brakes on lending.

The Mumbai-based bank said net profit rose to 23.27 billion rupees ($384.79 million) for the fiscal fourth quarter ending March from 18.9 billion rupees in the same year-ago period. Analysts had on average forecast a net profit of 23.91 billion rupees, according to Thomson Reuters data.

India's economic growth has almost halved to below 5 percent in the past two years on weak investments and consumer demand, the worst slowdown for the south Asian nation since the 1980s.

This has led to a decline in credit and a rise in bad debts, factors which analysts expect will weigh on the profitability of the banking sector this fiscal year.

HDFC, which has outperformed rivals with consistently high profit growth of about 30 percent and stable asset quality, has seen profit growth weaken in the past three quarters as loans and fee incomes grew at a slower pace.

Net interest income, the difference between interest earned and paid out, rose 15.3 percent to 49.53 billion rupees in the three months to March, the bank said on Tuesday.

Asset quality remained stable with non-performing loans as a percentage of total assets at 0.3 percent. Net interest margin for the quarter was at 4.4 percent.

Shares in HDFC Bank, valued at more than $28 billion, were up 1.3 percent at 3:02 p.m. The stock is 9.3 percent higher so far this year, underperforming a 14 percent rise in the Bank Nifty, but outperforming the 8 percent rise in the main market index.

HDFC Bank's 12-month forward price-to-book ratio is estimated to be the highest among 166 large and mid cap banks in Asia Pacific, according to StarMine SmartEstimates, which emphasises recent forecasts by top-rated analysts.

($1 = 60.4750 rupees)

(Reporting by Devidutta Tripathy; Additional reporting by Tripti Kalro in Bangalore; Editing by Miral Fahmy)