HDFC Bank, country’s second largest private bank, reported a 20 per cent growth in net profit for the July to September quarter 2015 at Rs 2,869 crore helped by robust loan growth and net interest income.
The profit was limited on account of nearly 50 per cent increase in provisions and contingencies during the quarter at Rs 681 crore (including provisions of Rs 484 crore towards bad loans, general provisions of Rs 133 crore, floating provisions of Rs 50 crore and other provisions at Rs 14 crore) as against total provisions of Rs 456 crore a year ago.
However, gross non-performing loans as a percentage of total loans improved to 0.91 per cent from 0.95 per cent in the April-June quarter and 1.02 per cent in the September quarter last year.
“This is no strong indication that the stress is reducing…The environment (on the corporate side) still remains fairly challenging and we will remain cautious (in lending to that segment),” said Paresh Sukthankar, Deputy Managing Director, HDFC Bank.
Net interest income (interest earned less interest expended) for the quarter ended September 30, 2015 grew by 21 per cent to Rs 6,680 crore driven by average assets growth of 29 per cent and a net interest margin (NIM).
Other income (non-interest income) rose 25 per cent to Rs 2,552 crore on account of higher fees & commissions, foreign exchange & derivatives and treasury gains.
To cut Base rate
Impacted by reduction in lending rates, NIM declined a tad at 4.2 per cent from 4.3 per cent in the same quarter last year.
With deposit rates further moving downwards, HDFC Bank may further reduce its base rate (9.35 per cent) by December end 2015. “We will recalibrate the base rate depending on the liquidity conditions and lowering of deposit rate,” Sukthankar said.
Total advances or loans surged by 28 per cent to Rs 4.19 lakh crore as on September 30, 2015, driven by growth in retail (29 per cent) and wholesale (23 per cent) portfolio. The domestic loan mix between retail-wholesale was 52:48.
Deposit growth saw 30 per cent rise, pumped up by healthy fixed deposit growth of 37 per cent and therefore Current and Savings account (CASA) share declined to 40 per cent, lowest since 2008-09.
Scam
On the recent Rs 5,000 crore-remittance scam involving an HDFC Bank official, Sukthankar said, “If there are certain conveniences given to remitters, it is a possibility that someone has taken advantage but it is not individual to a bank. We can only talk about it when we have more information as the investigation is still going on.”
HDFC Bank scrip ended almost flat at Rs 1094.80 per share, marginally down by 0.03 per cent over the previous close.