HDFC Bank today reported a 20.1 per cent rise in the October-December quarter net profit at Rs 3,358.8 crore on higher core interest income as the second largest private lender said it is untouched by the regulator's special review on big-ticket bad assets.
The core net interest income rose 24 per cent to Rs 7,068.5 crore in the October-December quarter, helped by asset growth of 28.2 per cent and an almost 0.10 per cent expansion in the net interest margin to 4.3 per cent, the bank said.
Other income rose at lower pace of 13.3 per cent to Rs 2,872.2 crore, with the core fee and commission incomes rising to Rs 2,004.8 crore from Rs 1,806.5 crore a year ago.
Unlike its peer Axis Bank, which witnessed a surge in bad assets following the RBI review of top 150 stressed assets, and others which are widely expected to show similar trends, HDFC Bank ducked the pressure with zero exposure to the list.
"We have not had any non-performing loans recognition issues (from the RBI's new list of top defaulters)," Deputy Managing Director Paresh Sukthankar told reporters.
It may be recalled that HDFC Bank was the first to declare Essar Steel account as an NPA in the first quarter of this fiscal itself and make full provisions for the same.
However, Sukthankar did not name the company, saying as a policy it does not disclose client specific details.
The bank reportedly had Rs 550 crore exposure to the company, which owes a whopping Rs 30,000 crore to 24 lenders, and has sold the NPA to ARCs at a hefty discount in April.
Sukthankar said there has been an increase of 0.06 per cent in the gross non-performing assets ratio to 0.97 per cent. He attributed this to slippages from the agri-banking and small businesses fronts, apart from a regulatory change in computation of credit card outstanding.
This has its overall provisions inching up to Rs 653.88 crore from Rs 560.43 crore a year ago. There was no sale of assets to ARCs during the quarter either, he said, adding the bank's overall restructured advances stood at 0.1 per cent of the Rs 4,36,364 crore loan book.
In a post-results statement, analysts at the domestic
brokerage Kotak Securities said the numbers meet expectations and pointed out to the overall stressed portfolio of 0.40 per cent as a plus point which makes it retain the positive outlook on the stock.
The bank scrip gained 0.94 per cent to close at Rs 1,039.95 apiece on the BSE, whose benchmark Sensex rose 0.21 per cent.
The proportion of the low-cost current and saving accounts stood at 40 per cent and the split between retail to wholesale in the advances mix stood at 53:47.
The cost to income ratio was stable at 43.7 per cent, but Sukthankar attributed this to the seasonal factors, saying from a long-term perspective, the bank wishes to keep it under 45 per cent and will have to work harder.
The bank added 626 branches in the 12 months period to December, taking the total to 4,281, putting pressure on the cost to income ratio.
During the reporting quarter, it bought back Rs 1,240 crore of home loans it originated for parent HDFC and Sukthankar said it will soon return to its average buyback of up to Rs 2,500-3,000 crore worth home loans soon.
Sukthankar said he does not see any scope for a cut in either the deposit or the lending rate during the current quarter and also expected a status quo on rates at the next month's policy announcement.
