Robust growth in retail loans coupled with lower provisions helped HDFC Bank report a 30 per cent increase in net profit in the second quarter ended September 30, 2012.
India’s second largest private sector bank logged a net profit of Rs 1,560 crore as against Rs 1,199 crore in the year-ago period.
Net interest income (interest earned less interest expended) or NII was up 27 per cent to Rs 3,732 crore. Other income was at Rs 1,345 crore, up 11 per cent.
NII was mainly driven by a loan growth of 23 per cent to Rs 2.32-lakh crore as on September 30, 2012.
“Retail loans, which constitute 53 per cent of total loans, grew by 32 per cent while corporate loan growth was at 14 per cent,” said Paresh Sukthankar, Executive Director, HDFC Bank.
‘Other income’
A break-up of ‘other income’ shows that, among others, fee income and commissions grew by 22 per cent to Rs 1209 crore and loss on revaluation/sale of investments of Rs 106 crores (loss of Rs 1.3 crores for the quarter ended September 30, 2011). Deposits grew 19 per cent in the quarter to Rs 2.74-lakh crore.
Net interest margin increased to 4.2 per cent from 4.1 per cent in the same quarter last year. Sequentially, however, the margin declined from 4.3 per cent.
Sukthankar expects the bank’s NIM to stay in the 3.9-4.2 per cent range in FY13.
Asset quality
During the quarter, provisions declined by 20 per cent to Rs 293 crore from Rs 366 crore in the September quarter last year.
Asset quality of the bank improved with gross non-performing assets (NPAs) ratio at 0.91 per cent from 1 per cent in last year’s quarter. While net NPAs remain unchanged at 0.2 per cent.
“We do expect certain brown-field project expansions and other projects to take off. This may drive some loan growth in the fiscal year ahead,” Sukthankar said.
The shares of HDFC Bank ended higher by 0.94 per cent to close at Rs 630.40 on the Bombay Stock Exchange.