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Saturday , January 19, 2013
HDFC Bank Q3 net increases 30%, on higher loan growth
Publication: Financial Chronicle , Journalist:Manju AB
Edition:Delhi/Hyderabad/Mumbai/Bangalore , Page No: 14, Location: Top­Right , Size(sq.cms): 1250
HDFC Bank Q3 net increases
30%, on higher loan growth
Credit card segment has grown faster than others, registering Rs.1,301 cr growth
MANJU AB
Mumbai
HDFC Bank, India's sec­
ond largest private bank by
assets, on Friday reported
30 per cent rise year­on­
year in its net profit to Rs
1,859 crore for the quarter
ended December 31, dri­
ven by aggressive loan
growth, healthy other in­
come and a stable asset
quality. The incremental
credit growth during the
quarter was Rs 10,000
crore of which Rs 6,800
crore came from retail as­
sets like credit cards, auto
loans and others, while the
wholesale or the corporate
book grew by Rs 3,200
crore during the quarter.
Paresh Sukhthankar,
executive director, HDFC
Bank, said in a media con­
call after the results, "The
bank managed to maintain
a healthy asset quality and
grew its advances higher
than the average banking
credit growth of over 15.6
per cent. We will continue
to grow faster than the
system and maintain our
M M a t a r o u n d 3 . 9­4.2
per cent."
The net interest margin
(NIM) of the bank stood at
4.1 per cent, higher than
the 3.9 per cent the bank
clocked in the year ago pe­
riod but a tad lower than
the 4.2 per cent that the
bank reported earlier this
year. Net interest margin,
a key performance
indicator, is the difference
between the interest
income generated by the
bank and the amount of
interest paid to depositors.
HDFC Bank has been
consistently focusing on
high yielding short term
advances on the whole
sale banking side and
unsec u r e d l o a n s l i k e
personal loans and credit
cards to grow its book.
During the quarter the
credit card segment has
grown faster than the rest
registering an incremental
growth of Rs 1,301 crore
taking the total outstanding
credit card portfolio to Rs
10,011 crore at the end of
December 31, 2012. The
ratio of the retail book to
the corporate book was at
53: 47 with retail garnering
a bigger growth with total
outstanding loans at Rs
1.30 lakh crore while the
whole sale book was at Rs
1,11,493 crore at the end
of the third quarter. Total
net advances of the bank
was at Rs 2,41,493 crore a
increase of 24.3 per cent
over the year ago period.
"We expect the trend of
retail advances outpacing
the wholesale advances to
continue for the next few
months until project im­
plementations begin from
the companies," said
Sukhthankar.
During the quarter, net
interest income or the dif­
ference between the inter­
est earned and paid out,
rose nearly 22 per cent to
Rs 3,800 crore. Other in­
come increased 27 per
cent to Rs 1,800 crore
major portion contributed
by growth in fee and com­
mission income.
Saday Sinha, banking
analyst, Kotak Securities,
said in a note, "HDFC
Bank has delivered yet an­
other quarter of 30 per
cent PAT growth, which is
not a surprise, as they
have been consistently
doing this for last one
decade. Its NIl also came
strong at 22 per cent
(year­on­year) on the back
of strong loan growth
along with stable NIM.
Strong traction in fee­
based income growth is
positive while some up­tick
in NPAs in absolute terms,
can be viewed negative.
However, NPAs in the
perc e n t a g e t e r m s
remained within the
management guidance."
Gross non­performing
asset (NPA) ratio rose to
1 per cent as against 0.91
p e r c e n t i n t h e J u l y­
September quarter. The
incremental gross non­
performing assets (NPAs)
during the quarter were Rs
300 crore mostly coming
f r o m c o nstruction
equipment, commercial
vehicle and retail loans.
About Rs 11 crore of
loans were restructured
during the quarter.
The HDFC Bank stock
was down 1.18 per cent
closing at Rs 659 on the
Bombay Stock Exchange
(BSE).'
Hatim Broachwala,
analyst at Karvy Broking,
said in a note that the
bank's asset quality has
seen a slight deterioration.
"Gross NPA has increased
by 9 basis points
sequentially to 1 per cent,
yet net NPA has been flat
sequentially at 0.2 per
cent, supported by higher
loan loss provision of Rs
280 crore, as against Rs
170 crore during last
quarter. Some amount of
stress is seen in commer­
cial vehicle/construction
equipment segment. It
made a floating provision
of Rs 3 crore during the
quarter. Provision
coverage has slightly fallen
to 79.6 per cent. We
believe asset quality has
peaked and it will be a
major challenge to improve
further, hence, we factor
slight deterioration from
h e r e o n . "
manjuab@mydigitalfc.com