Aided by strong growth in interest income, the country’s second-largest private lender, HDFC Bank, today reported a 32.6 per cent increase in net profit to Rs 836.6 crore for the quarter ended March 31, 2010, compared to Rs 630.9 crore a year ago. The bank’s consolidated net profit grew 33.6 per cent to Rs 3,003.7 crore for the year ended March 31, 2010.
Net interest income, or the difference between interest earned on loans and interest paid on deposits, grew 27 per cent over the year-ago quarter to Rs 2,351.4 crore. The growth was driven by 27 per cent growth in advances and a net interest margin of 4.4 per cent for the quarter.
Non-interest income fell 20 per cent over the quarter to Rs 903.6 crore, mainly due to a loss of Rs 47 crore from trading operations. In the corresponding quarter last year, the bank had booked trading gains of Rs 244 crore. The biggest contributor was income from fees and commissions, which grew seven per cent to Rs 723 crore. Income from distribution of third-party products such as insurance and mutual funds was about Rs 116 crore. The other major component was revenue from foreign exchange and derivatives at Rs 180.1 crore.
Low-cost current account and savings account deposits grew to 50 per cent of total deposits. This helped HDFC Bank bring its overall cost of deposits down to 4.7 per cent. “Our branch network has increased, so that helped us grow CASA. Also, since we are flush with fixed deposits, we did not push FDs as aggressively as CASA,” said HDFC Bank Executive Director Paresh Sukthankar. “Going forward, we will push both CASA and term deposits, so we expect our CASA ratio to be in the range of 45-50 per cent.”
| BANKING ON INTEREST | |||
| Q4FY09 | Q4FY10 | % chg | |
| Total income | 5,365.52 | 4,956.66 | -7.62 |
| Interest income | 4,250.83 | 4,053.11 | -4.65 |
| Other income | 1,114.69 | 903.55 | -18.94 |
| Total expenses | 3,795.00 | 3,262.29 | -14.03 |
| Operating profit | 1,570.52 | 1,694.37 | 7.88 |
| Non-tax provisions | 657.41 | 439.91 | -33.08 |
| Net profit | 630.88 | 836.62 | 32.61 |
| Gross NPA | 1,988.07 | 1,816.76 | -8.61 |
| Net NPA | 627.62 | 392.05 | -37.53 |
| Advances | 98,883.05 | 1,25,830.6 | 27.25 |
| Deposits | 1,42,811.58 | 1,67,404.44 | 17.22 |
| (all figures in Rs crore) NPA: Non-performing assets Data on NPA, deposits and advances for March 31 | |||
The bank reported 27 per cent growth in gross advances for the financial year ended March 31, 2010, which is more than 10 percentage points higher than the banking industry’s credit growth of 16.7 per cent. “The loan growth was driven by auto loans, home loans, commercial vehicle loans and business banking (loans to small businesses),” said Sukthankar. "In the new financial year, we expect credit growth of the banking industry to be around 20 per cent and we will be a few percentage points above that."
While corporate advances grew 40 per cent over the year, retail advances grew 22 per cent. Retail loans now constitute 55 per cent of the lender’s loan book. Deposits grew 17 per cent over the year to a total outstanding of Rs 1,67,000 crore. The bank also managed to reduce its gross non-performing assets to Rs 1,816 crore as of March 31, 2010 from Rs 1,998.07 crore a year ago.
