Q4 Score Loans, Fee Income Lift HDFC Bank Net 33%

Net climbs to . 1,114 cr; bank to split stock at 5-for-1 ratio to lure retail investors

HDFC Bank's quarterly earnings beat market expectations with a 33% jump on strong loan growth and higher fee income. The bank said, after market hours, it will split stock for the first time to lure retail investors. Net profit for the March quarter rose to . 1,114.7 crore, up from . 836.62 crore, a year earlier. It decided to pay a dividend of . 16.50 a share and split shares into five-forone, with a face value of . 2 apiece. Shares ended 1.9% lower at . 2,315.70.
"The rise in profits was largely driven by growth in net interest income on account of loan growth and increase in fee income," said executive director Paresh Sukthankar. Speaking on the stock split, Mr Sukthankar said: "The stock split will ensure higher retail participation in the scrip, which has slipped to less than 10%."
The bank's other income — that includes fees, commissions and earnings from foreign exchange and derivatives transactions — grew 32.1% in the quarter to . 1,255.8 crore from . 950.76 crore. The main contributor to other income was fees and commissions of . 1,000.6 crore. Its total income for the quarter ended March 31, 2011, increased by . 6,724.3 crore against . 5,003.87 crore at the end of March 31, 2010.
The bank's advances portfolio increased by 27.1% to . 1,59,983 crore. "The retail loan book accounts for 50% of the loan book. The three business segments, including retail, wholesale and treasury operations, will drive the bank's growth in the coming quarters," said Mr Sukthankar. "The bank will continue to grow faster than the industry, which is over 20%. The increased branch network and penetration will also drive the deposit growth," said Mr Sukthankar. The bank's deposits rose 24.6% to . 2,08,586 crore. Its net interest margin for the quarter fell to 4.2% from 4.4%. "The net interest margin is expected to fluctuate by about 10-15 basis points from the current level in the coming quarters. Interest rates will remain stable in the near term. However, another 50-basis point increase in policy rates could put pressure on lending rates," he said. The bank has seen a marginal rise in its total restructured loans to 0.4% at the end of March 2011 from 0.3% a year earlier as some microfinance institutions have approached the bank for a loan recast.
IndusInd Q4
Net Rises 75%
MUMBAI Higher other income and advances, coupled with better margins, pushed the fourth quarter profit of private sector lender IndusInd Bank by a robust 75.3% to . 171.76 crore. The bank is bullish about growth in the coming quarters as well. Net profit for the full fiscal rose a healthy 64.80% to . 577.32 crore, up from . 350.31 crore, on the back of good performance by all its verticals .

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