HDFC Bank Q3 net up 31% to Rs 1,430 cr

HDFC Bank today reported a 31% growth in its net profit at Rs 1,429.66 crore for the December quarter, mainly on account of increase in interest income and lower provisioning for bad loans.

The banks's net profit in the October-December 2010 was Rs 1,087.83 crore.

During the quarter, net interest income of the bank rose 12% y-o-y to Rs 3,116 crore, HDFC Bank said in a statement. Besides, non-interest income, which include fees and commissions, was up 26%.

Meanwhile, the private lender said it has reduced lending to corporates to protect margins.

"On wholesale side, while we continue to grow our book at 15%, we have cut back a little on corporate lending," HDFC Bank Executive Director Paresh Sukthankar said in a conference call.

The statement further said in the backdrop of "stable asset quality" total provisioning for bad loans and other contingencies have came down to Rs 329.2 crore in the December quarter from Rs 466 crore a year ago.

On the possibility of RBI softening interest rates, the bank said it is unlikely to come down before March.

"I do not expect any major decision in the policy review. The interest rates will start coming down by end of March or by April-May," it said.

The Reserve Bank has hiked interest rates 13 times since March 2010, making loans costlier. However, it did not hike rates in its last monetary policy review.

Meanwhile, the board of HDFC Bank has approved the appointment of Keki Mistry as an additional Director of the bank. He is also the Vice Chairman and CEO of Housing Development Finance Corporation (HDFC).

Further, the bank's net interest margin at the end of the December quarter stood at 4.1%, and net non-performing assets was 0.2%.

Total income of the bank rose to Rs 8,622.64 crore during the October-December quarter, from Rs 6,357.78 crore in the same period a year ago.

For the nine-month ending December 2011, HDFC Bank's net profit rose 32.1% to Rs 3,714 crore.

Sukthankar said the bank's loan exposure to the power sector stood below two%, while that in aviation was less than one%.

Shares of the bank closed 0.98% up at Rs 485 on the BSE.