Net interest income rises 25 per cent.
Beating forecasts, private sector lender HDFC Bank on Thursday reported a net profit of Rs 1087.83 crore for the quarter ended December, up 32.9 per cent from Rs 818.50 crore in the year-ago period.
The net interest income rose 24.9 per cent to Rs 2,776.7 crore, as against Rs 2,224 crore in the year-ago period. Total income grew 28.86 per cent to Rs 6,357.8 crore.
“The rise in net interest income came on the back of asset growth and net interest margins,” Executive Director Paresh Sukthankar said.
At 4.2 per cent, the net interest margin was slightly lower than 4.4 per cent in the corresponding quarter last year. The capital adequacy ratio stood at 16.3 per cent.
While loans grew 32.7 per cent to Rs 1,60,619 crore, deposits rose 24.2 per cent to 1,92,202 crore. Driven by 30.9 per cent growth in savings deposits, the current and savings account ratio increased to 50.5 per cent. The net non-performing asset ratio declined to 0.2 per cent from 0.5 per cent in the year-ago period.
“We are experiencing an extremely good loan demand from most segments, particularly retail-secured ones like auto, commercial vehicle and home loans,” Sukthankar said.
The credit-deposit ratio on a year-on-year basis stood at 82 per cent and the bank expected a better alignment of credit and deposit growth, he added.
Earlier this week, the Reserve Bank of India (RBI), in its third quarter policy review, pointed out that the pace of growth in credit had been much higher than deposits during the last one year and this was the structural reason behind the liquidity pressure in the system.
While year-on-year credit growth for all banks as on date was 24.2 per cent, deposits grew 16.5 per cent as against RBI’s projection of 20 per cent and 18 per cent, respectively.
| GOING STRONG PERFORMANCE IN QUARTER ENDED DECEMBER 31 | ||||||
| (Rs crore) | HDFC Bank | IDBI Bank | Dena Bank | |||
| Dec ‘10 | %Chg* | Dec ‘10 | %Chg* | Dec ‘10 | %Chg* | |
| Interest earned | 5,229.96 | 29.62 | 4,712.33 | 17.63 | 1,289.89 | 26.97 |
| Other income | 1,127.82 | 25.44 | 447.21 | 4.65 | 127.06 | -4.57 |
| Total income | 6,357.78 | 28.86 | 5,159.54 | 16.38 | 1,416.95 | 23.32 |
| Interest exp. | 2,453.27 | 35.47 | 3,508.30 | 6.67 | 823.47 | 12.36 |
| NII | 2,776.69 | 24.86 | 1,204.03 | 67.93 | 466.42 | 64.81 |
| Net profit | 1,087.83 | 32.91 | 454.08 | 58.13 | 155.21 | 15.38 |
| Source: Capitaline *Over previous year Data compiled by BS Research Bureau | ||||||
“Clearly there is a bridge between deposit and credit growth and that’s the structural factor responsible for the liquidity deficit...they (banks) must increase their deposits and restrain credit. The credit and deposit growth has to be aligned,” RBI Governor D Subbarao said yesterday.
“We are not required to slow down our advances growth as we remain comfortable on the liquidity front. A deposit growth rate of 24.2 per cent is way higher than the industry average. With the recent increase in rates, we do expect some pick-up in deposits,” Sukthankar said.
The total provisioning rose 4.1 per cent to Rs 465.9 crore.
The shares of the bank closed at Rs 2,052.15, down 1.67 per cent, on the Bombay Stock Exchange.
Dena Bank net up 15%
Dena Bank on Thursday reported a net profit of Rs 155.21 crore for quarter-ended December, as against Rs 134.52 crore in the year-ago period, rise of 15.38 per cent.
Total income rose by 23.32 per cent to Rs 1,416.95 crore. The net interest income increased 64.81 per cent to Rs 466.42 crore.
The ad-hoc provisioning of Rs 70 crore for the second pension option to employees and an enhancement in gratuity limits impacted the bottom-line (profit), chairman and managing director D L Raval said.
The bank is treading caution while giving credit to real estate, capital markets, power and the diamond industry. Its exposure to the power sector has already reached sectoral limits.
IDBI net up 58%
Private lender IDBI Bank reported rise of 58 per cent in net profit to Rs 454 crore for the quarter-ended December, as against Rs 285 crore an year ago. While the net interest income grew 68 per cent to Rs 1,204 crore, the net interest margin touched 2.28 per cent. It is for the first time that NIM has moved beyond the two-per cent mark.
