By Indulal PM and Devidutta Tripathy
MUMBAI (Reuters) - India's HDFC Bank Ltd said on Saturday its quarterly net profit grew by a fifth, helped by a surge in corporate and retail credit demand amid hopes of a pick-up in Asia's third-largest economy.
New Delhi expects the economy to grow an annual 7.4 percent in the year ending in March, faster than a revised 6.9 percent a year earlier.
Banks in India have been hurt by an economic slowdown in the past two years that has weighed on credit growth and led to a spike in bad loans, though private lenders such as HDFC Bank have been relatively less impacted by bad loan problems than their state rivals.
HDFC Bank's Deputy Managing Director Paresh Sukthankar said demand for corporate loans should continue to improve in coming quarters as small and mid-sized firms also start investing to boost capacity.
The second-biggest Indian private sector lender by assets said net profit rose to 27.95 billion rupees ($450.33 million) in its fiscal third quarter to Dec. 31, from 23.26 billion rupees in the same period a year earlier.
Analysts on average had expected the bank to post a profit of 27.8 billion rupees, according to data compiled by Thomson Reuters.
The bank's advances grew 17 percent in the quarter to 3.5 trillion rupees, while net non-performing loans as a percentage of net loans was 0.3 percent, unchanged from the September quarter.
HDFC Bank, the most-valuable lender in India, this month raised $1.6 billion from stock sales in the United States and India to boost capital ahead of an expected pick up in economic growth that will boost credit demand.
"We are extremely well capitalised and have enough capital to support growth," Sukthankar said.
After rising 43 percent in 2014, HDFC Bank shares have added 12 percent this year, outperforming the broader market index. The main bank stock index surged nearly 65 percent last year and is up just over 3 percent this year.
($1 = 62.0658 Indian rupees)
(Writing by Sumeet Chatterjee; Editing by Kim Coghill)
