HDFC Bank, the second largest private sector bank, today reported 40% increase in its net profit for the second quarter ended September 2007 (Q2FY08) from a year earlier on robust growth in consumer loans and fee income.Net profit rose to Rs 368.48 crore for the quarter from Rs 262.94 crore in the corresponding quarter last year.The bank's total income for the quarter grew 44% to Rs 2,845 crore from a year earlier. Other income (non-interest revenue) for the second quarter was Rs 482.4 crore as against Rs 397.7 crore a year earlier, including fee and commission income of Rs 391.9 crore."The growth has been well balanced for the bank. The retail business has grown at 37% and the corporate business has also grown faster. Our retail loan growth is not dependent on mortgages. We have a diversified portfolio. Within retail, there is some slowdown in the two wheeler loans, but business banking, personal loans, credit cards and third party product distribution did well,'' said Paresh Sukthankar, head of credit and market risk, HDFC Bank.The bank's total deposits were Rs 91,069 crore, an increase of 43.5% and total customer assets (including advances, corporate debentures and investments in securitised paper) increased to Rs 65,812 crore as of September 30, 2007 from Rs 49,326 crore, a growth of 33.4%. Retail constitutes around 55.1% of HDFC Bank's gross advances."There has been no change in our core growth strategy. The opportunity was there and we have cashed in on it. Whenever we see the opportunity, we will grow faster,'' said Sukthankar, when asked about net profit growth which grew at a faster pace than the usual 30%.The bank's net interest margin (NIM) stood at 4% as against 3.8%. In 2006-07, the bank's NIM was 4.3 %. "We don't see any reason why the margin should not be in the range of 3.8-4% in the coming quarters. We will have to see the impact of the recent softening of rates on demand. We would continue to focus on retail business and grow the business banking, personal loan and credit card segments. On the wholesale side, we see growth opportunity in the emerging corporate and large corporate business,'' said Sukthankar.The bank's capital adequacy at the end of September 2007 was 14.9%, as the bank raised $1 billion through an American depository receipt (ADR) issue while net non-performing assets stood at 0.4%.
