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Saturday , January 19, 2013
HDFC Bank Net Rises 30% to Rs 1,859 crore
Publication: The Economic Times , Agency:Bureau
Edition:Hyderabad/Chandigarh , Page No: 10, Location: Top­Right , Size(sq.cms): 288
HDFC Bank Net Rises
30% to Rs 1,859 crore
Retail grows, but treasury falters; slump & mining ban reflect in nos.
OUR BUREAU
MUMBAI
DFC Bank, the country's
second largest private sec­
tor bank, reported a 30%
quarterly growth in net profit as
corporate, and retail loans helped
e v e n a s p r e­tax profit from
treasury halved.
The economic slowdown and
the suspension of mining in
many states began to reflect even
in the books of HDFC Bank,
which largely remains insulated
as bad loans from the segment
rose substantially.
But the lender led by Aditya
Puri is confident of maintaining
its net interest margin, a measure
of its profitability.
The bank said net profit rose to
Rs 1,859 crore, from Rs l,430
crore a year earlier, in line with
market expectation.
"Capex activity has been slug­
gish which is affecting corporate
credit growth," said Paresh Suk­
thankar, executive director at
HDFC Bank. "Commercial vehi­
cles and equipment portfolio is
seeing stress on account of slow­
down in economic activity."
Banking system, dominated by
H
the state­run banks, is under
stress as economic growth slow
down to a near­decade low and
dampens demand for loans. But
private sector lenders, such as
Axis, Indus Ind and HDFC Bank,
are overcoming the bad industrial
climate by raising their lending to
retail.
Net interest income, the differ­
ence between what the bank
pays for funds and what it earns
from lending, rose 22% to Rs
3,799 crore on 24% loan growth.
Non­interest income rose to Rs
1,799 crore from
Rs l,420 crore driven by a 24%
increase in fees and commissions
to n,402 crore.
"The market is a bit disappoint­
ed with the lower net interest in­
come. This could be on account of
the recent base rate revision by
the bank or lower­than­expected
advances growth or addition in
non­performing loans," said Ka­
jal Gandhi, banking analyst from
ICICI Securities.
Its net interest margin remained
stable­a t 4 . 1 % y e a r­on­year.
However, when compared to the
September quarter, the NIM has
dipped to 4.1 % from 4.2 %
"We have traditionally main­
tained the NIMs in the range of
3.9% to 4.2% and we would be in
that range," said Sukthankar.
The bank's gross non­perform­
ing loans has increased by Rs 411
crore to Rs 2432.21 crore in the
quarter ended December 2012.
G r o s s n o n­performing assets
were at 1 % of gross advances,
a n d n e t n o n­performing
a s s e t s a t 0.2 % of net advances
at the end of December 31,2012.
Provisions for bad loans at the
end of December quarter dipped
to Rs 307.2 crore from Rs 329.2
crore in the corresponding quarter
last year.
MAJOR DRAGS
Capex activity has been
sluggish which is
affecting corporate credit
growth. Commercial
vehicles and equipment
portfolio is seeing stress on
account of slowdown in
economic activity
Paresh Sukthankar,
EXECUTIVE DIRECTOR AT HDFC BANK
MARKET CONCERNS
The market is a bit
disappointed with the lower
net interest income. This
could be on account of the
recent base rate revision
by the bank or lower­than­
expected advances growth
or addition in non­
performing loans
Kajal Gandhi
BANKING ANALYST, ICICI SECURITIES