HDFC Bank net up 30%

HDFC Bank, the country's second largest private sector bank, today reported a 30 per cent rise in its net profit in the first quarter of 2006-07, as advances grew 47 per cent on continued retail lending boom.

Retail loans book increased by 57 per cent year-on-year to Rs 23,121 crore, which helped its aggregate loans portfolio, including corporate loans, to expand to Rs 40,565 crore as on June 30, 2006.

The bank's net profit in the quarter ended June 30, 2006 increased to Rs 239.3 crore from 183.53 a year earlier. The bank's year-on-yar net profit growth in every quarter since June 2002 has been in the 30-31 per cent range.

The net interest income for the quarter ended June 30 increased by 56.1 per cent to Rs 817.6 crore from a year earlier, led by average asset growth of 52.5 per cent and a stable interest margin of 4 per cent.

Paresh Sukthankar, country head, credit & market risk, said the net interest margin in subsequent quarters would be in the range of 3.8-4.0 per cent. The bank's net interest income during April-June 2006 jumped 56 per cent to Rs 818 crore from Rs 524 crore a year earlier. Its income from other services such as fees and commissions rose 33.5 per cent to Rs 351 crore.

Interest expenses during the first quarter soared by 86 per cent to Rs 687 crore from Rs 370 crore, reflecting a rise in cost of funds. Deposits grew by 58.1 per cent to Rs 60,630 crore from Rs 38,354 crore a year earlier. Cost of deposits has increased by 50-100 basis points.

"It is too premature to comment on any increase in lending rates as it would depend on the cost of deposits and the market indications," said Sukthankar, when asked if the bank was considering a hike in lending rates.

The net non-performing assets of the bank stood at 0.4 per cent of net advances at the end of the first quarter.