HDFC Bank net rises 45% on interest income

CORPORATE SCORECARD

The country’s second largest private sector lender HDFC Bank on Monday announced a 44.55 per cent jump in its net profit at Rs 464.35 crore for the quarter ended June 30, 2008, as against Rs 321.23 crore during April-June last year. The bank’s total income for the quarter rose 59.6 per cent to Rs 4,215.2 crore from Rs 2,641.7 crore in the first quarter of 2007-08.

HDFC Bank, which merged Centurion Bank of Punjab in May this year, reported a dip in its net interest margin (NIM) to about 4.1 per cent at the end of the June 2008 quarter, compared with 4.4 per cent in the corresponding period last year. The bank said the reduction in NIM was a result of the merger with CBoP, that recorded an NIM of 3.6 per cent.
 

Performance in Q1 ended June
Rs crore	2007	2008	Growth (%)
Interest earned	2125.88

3621.73 70.36 Other income515.82593.4215.04 Total expenditure1858.023187.6471.56 PBT783.681027.5131.11 Net profit321.23464.3544.55 Source: BSE

“We have been able to pass on the increasing interest rates to our loan book, and if the rates go up further, we may not see our margins under pressure. Our NIM is likely to be in the range of 3.9 per cent and 4.2 per cent for the coming 14-15 months,” said the bank’s executive director Paresh Sukhtankar.

The net interest income rose to Rs 1,723.5 crore in the first quarter, registering a growth of 74.9 per cent on a year-on-year basis.

HDFC Bank reported a 12 per cent rise in provisions at Rs 344.5 crore during the quarter, as against Rs 307.12 crore during April-June last year. During the first quarter this year, the bank made a provisioning of Rs 324.4 crore towards non-performing assets (NPAs) and standard assets, compared with Rs 299.7 crore in the corresponding period last year.

During the quarter, the bank took a mark-to-market (MTM) hit of about Rs 72 crore on its investment portfolio. “About 80 per cent of our assets are in the held-to-maturity (HTM) category and the remaining are in available for sale (AFS). Therefore, the MTM numbers might not go up significantly from these levels unless the central bank makes a huge hike in policy rates,” Sukhtankar said.

The bank earned Rs 2,636.38 crore from interest on advances during the first quarter, about 81 per cent higher from Rs 1,453.62 crore for the same period last year.

“The growth in advances will depend on parameters such as interest rates and liquidity conditions. We expect over 30 per cent growth in advances during the ongoing year,” Sukhtankar said.