HDFC Bank’s profit soars 45% on high loan growth

CENTURION ADDS TO NUMBERS

Interest Income Climbs 75% To Rs 3,622 Cr

 HDFC Bank posted a 44.6% growth in net profit at Rs 464 crore for the quarter ended June 2008. Breaking away from the industry's trend of slower credit growth, the bank has reported an 80% rise in advances.
    The figures for the quarter include that of the merged entity, Centurion Bank of Punjab (CBoP), which was amalgamated with the bank with effect from April 1. Without the merger, the percentage growth in credit would still be in the mid-thirties.
    The results are marginally above market expectations. CBoP had reported a net profit of Rs 33 crore in the first quarter of the previous year, while HDFC Bank reported a net profit of Rs 321 crore in June 2007.
    According to HDFC Bank executive director Paresh Sukthankar: The core loan growth on a standalone basis for HDFC Bank has been in the mid-30s. Retail loans have seen a growth of around 31%, while corporate loans grew 34-35%. The balance sheet size rose 59.5% to Rs 1,68,598.7 crore. Net advances rose 79.8% to Rs 96,797 crore during the review period.
    Last year's CBoP figures also included Rs 10 crore accrued from the sale of fixed assets and write back of provisions. Incidentally, HDFC Bank officials said retail lending will continue to grow at 25-30% for the year. This is in sharp contrast to the country's largest retail lender ICICI Bank's view, which said retail loans will grow at only 5-10%.
    HDFC Bank has been one of the few banks to consistently post profit between 30.4% and 32.7% for the past few years. However, last year, the bank broke this trendline growth and posted quarterly growth rates between 34% and 45%. The bank's scrip ended flat at Rs 1,127.05 on the Bombay Stock Exchange.
    Interest income grew 75% to Rs 3,621.7 crore, while other income was flat at Rs 593.4 crore (Rs 572.5 crore). The major contributors to the other income were fees & commission, which grew 37.3% to Rs 511.2 crore. Forex/derivatives revenues stood at Rs 157.4 crore (Rs 146.5 crore), while the bank booked loss on revaluation/sale of investments at Rs 77.6 crore (profit of Rs 52.6 crore for the previous year).
QUARTER SHOW
ONGC
44%
NET PROFIT
Q1 FY09
Profit
surges to Rs 6,636 cr against Rs 4,611 cr in the year-ago period.
L&T
33%
NET PROFIT
Q1 FY09
Net rises to
Rs 502 cr in the June quarter. Total income up 51% at Rs 7,103 cr. HDFC Bank's deposits grow 60%
    "THE bank posted a 47% year-on-year growth in its loan book and a 34% growth in deposits on a consolidated basis, which is healthy in the current economic environment," said Edelweiss Capital analyst Vishal Goel.
    Mr Sukthankar added retail and corporate loan segments will grow at 25-30% this year. This is against an industry growth of 15% in retail loans and 20% in corporate loans. Total deposits increased 60.4% to Rs 1,30,918 crore. The bank's current and savings account mix was at 44.9%. Provisioning rose 12.2% to Rs 344.5 crore.
    Bad loans, however, have shown a sharp rise, though in percentage terms, it's marginal. Gross non-performing assets more than doubled to Rs 1,502.7 crore from Rs 710.2 crore (1.5% against 1.3%). Net NPAs also saw a similar rise as it rose to Rs 496.1 crore from Rs 214.2 crore (0.5% against 0.4%). The capital adequacy ratio (CAR) stood at 12.2%.
    According to Mr Sukthankar, there have been fresh additions of only Rs 80 crore on a quarter-on-quarter basis. Around Rs 520 crore was added to gross NPAs because of the merger.