HDFC Bank Q4 net grows 20 pc to Rs 3,374 crore on NII growth

Country's second largest private lender HDFC Bank today reported a 20.2 per cent jump in its March quarter net at Rs 3,374.2 crore, helped by a healthy rise in core net interest income (NII).
The city-headquartered bank, which registered around 30 per cent profit growth for over a decade till 2013-14, posted a 20.4 per cent growth in post-tax profit at Rs 12,296.2 crore for fiscal 2015-16.
For the January-March period, NII rose 24 per cent to Rs 7,453.3 crore, while the non-interest income was up 11.8 per cent to Rs 2,865.9 crore.
Deputy Managing Director Paresh Sukthankar said NII was up on advances growth, which came in at 27 per cent for the fiscal, along with an expansion in the net interest margin (NIM) at 4.3 per cent.

He said the bank will maintain its NIMs at 4 to 4.4 per cent and it does not see any impact of the marginal cost of funds-based lending rate on its spreads.
Fees and commissions grew to Rs 2,172.4 crore from Rs 1,834.8 crore, but it was a dip in the forex and derivates revenue and gains on revaluation or sales of investments which limited other income growth to 11.8 per cent in the fourth quarter of 2015-16.

Sukthankar said the bank is seeing some demand for long-term loans from corporates, but working capital and medium-term loans continue to be the mainstay of corporate demand.

On the retail front, he said the lender will continue to focus on the consumption demand-led credit needs, adding that the commercial vehicle book is performing well for over two quarters now.
The lender has grown both its credit cards and personal loan books over the past fiscal by 27 per cent and 44 per cent, respectively, and continues to see opportunity in the unsecured book due to the under-penetration in the market.
He said the introduction of digital banking, like the '10-second personal loans', helped grow the unsecured book.
The retail and corporate lines grew at an equal pace in 2015-16 and from a book composition, both stand at an almost equal footing.

On the asset quality front, Sukthankar said the bank was able to maintain the gross non-performing assets ratio at 0.94 per cent and the restructured book at 0.1 per cent, but conceded that the environment is challenging.
Sukthankar said there has been some uptick in asset
quality on loans to small businesses and agriculture, which is cyclical in nature.
During the quarter under review, the bank bought Rs 4,799 crore of home loans which originated from its parent HDFC, he said.
The bank met its overall priority sector lending target at 40 per cent, but was not able to achieve the sub-targets for small and marginal farmers and weaker sections, he said.

The private lender's overall capital adequacy stood at 15.5 per cent with core tier-I capital standing at 13.2 per cent.
It announced a dividend of Rs 9.50 per share of Rs 2 face value as against Rs 8 declared last fiscal.
Analysts at domestic brokerage Choice Broking said even though the numbers were consistent with past performance, the 0.03 per cent improvement in gross NPA was a surprise and the bank is well positioned to benefit from economic revival.
The bank's scrip closed 0.11 per cent up at Rs 1,092.30 at the BSE, whose benchmark fell 0.16 per cent.