Lending rate may rise 100 basis points.
Backed by healthy growth in interest income, fees and commissions, HDFC Bank has reported 33.9 per cent growth in net profit in the first quarter ended June 2010.
Its net profit in the April-June quarter rose to Rs 811.71 crore from Rs 606.11 crore in the corresponding period last year. The total income rose to Rs 5,360 crore from Rs 5,136.8 crore a year ago.
The net interest income (interest earned less interest expended) grew by 29.4 per cent to Rs 2,401.1 crore, on the back of an average asset growth of 23.2 per cent. The net interest margin (NIM) for the quarter was 4.3 per cent as against 4.2 per cent for the quarter ended June 2009.
| REPORT CARD Performance on quarter ended June | ||
| (Rs crore) | June 2010 | % Chg* |
| Interest earned | 4,420.15 | 7.99 |
| Other income | 939.88 | -9.94 |
| Total income | 5,360.03 | 4.35 |
| Interest expended | 2,019.01 | -9.77 |
| NII | 2,401.14 | 29.40 |
| Net profit | 811.71 | 33.92 |
| Source : Capitaline *Over previous year Data compiled by BS Research Bureau | ||
The impact of daily calculation of interest on savings deposits in the first quarter was 18 basis points. NIM (4.3 per cent) was after absorbing interest costs on savings deposits, Executive Director Paresh Sukthankar said.
Its non-interest revenue in the quarter was Rs 939.9 crore. The growth was primarily contributed by fees and commissions of Rs 745.7 crore, up 14.9 per cent over Rs 649.3 crore in the first quarter of 2008-09. The revenues from exchange/derivative rose to Rs 171.8 crore over Rs 137.8 crore in the quarter ended June, 2009.
However, profit on revaluation/sale of investments was significantly lower at Rs 21.5 crore as against Rs 256.0 crore a year ago.
Its total balance sheet size increased by 25.3 per cent to Rs 2,33,253 crore. Total deposits were Rs 183,033 crore, up by 25.6 per cent from June 2009. With savings account (SA) deposits at Rs 53,869 crore and current account (CA) deposits at Rs 36,169 crore. CASA deposits registered growth of 37 over June 30, 2009. CASA’s share in total deposits was 49.2 per cent at the end of June 2010.
Gross advances grew by 40.2 per cent over Rs 1,47,620 crore. Of this, around 10 per cent increase in advances was due to short-term, one-off wholesale loans.
The growth in core advances was 30 per cent. The one-time short-term loans included credit to telecom companies for payment of fees, Sukthankar said.
Retail loans grew by 24.4 per cent to Rs 76,068 crore and constituted 51.5 per cent. The auto loans had the largest share of Rs 21,000 crore, followed by business banking (loans to trading and small enterprises) at Rs 14,000 crore.
Referring to impact of Reserve Bank of India’s hardening of policy rates, he said the increase in policy rates till December 2010 could be 25-75 basis points. The upward move in lending rate will be shaped by policy rates and liquidity in the system. They could go up by 50-100 basis points.
Its capital adequacy ratio (CAR) remained strong at 16.3 per cent, as against 15.4 per cent a year ago.
The portfolio quality remained healthy in the quarter with gross non-performing assets (NPAs) at 1.2 per cent of gross advances down from 2.1 per cent a year ago.
The total restructured assets, including applications received for loan restructuring, were 0.3 per cent of the bank’s gross advances as of June, 2010. Of this, amount categorised as standard assets was 0.2 per cent of the bank’s gross advances.
HDFC Bank stock closed higher (0.57 per cent) at Rs 2,050.35 on Bombay Stock Exchange.
