Higher fees, commission fuel HDFC Bank Q2 net 43%

HDFC Bank, the country’s second largest private sector lender, which merged Centurion Bank of Punjab with itself in May this year, today reported a 43.3 per cent rise in net profit at Rs 528 crore for the second quarter ended September 2008.

While the quarterly results are not comparable with HDFC Bank’s standalone results for the July-September quarter last year, the bank said its second-quarter performance was buoyed by higher fees and commission and a strong growth in margin. The net interest margin (NIM) for the quarter was estimated at 4.2 per cent. The bank’s Executive Director Paresh Sukhtankar said bank is expected to maintain the level for the rest of the year.
 

STRONG NUMBERS Financial performance in 2nd quarter ended September 30
In Rs crore	HDFC Bank

 

IndusInd Bank

20072008*% chg20072008% chg  Interest earned236339916946055019 Other income48264333658937 Expenditure201835117447857220 PBT827112336486740 Net profit36852843223451 CAR (%)14.9011.40 11.7712.45  NPR (%)15.6013.23 4.856.12  Source: BSE                                       *CBoP merged with HDFC Bank in May 2008

During the quarter, the bank’s non-performing assets (NPAs) almost doubled to Rs 584.12 crore as against Rs 243.74 crore during the same period last year. The net NPA for the bank stood at 0.6 per cent of its net advances at the end of September. The bank attributed the increase in net NPAs to the merger with Centurion Bank of Punjab (CBoP). “We hope to hold the NPA levels in the range of 0.5 to 0.8 per cent during the year,” said Sukhtankar.

HDFC Bank said if CBoP was excluded, it has and would be able to maintain loan growth of 30-32 per cent for the trailing quarters. During the July-September quarter, the bank has seen higher loan growth in wholesale banking compared with that in retail banking, said Sukhtankar.

The private bank has made a provision of about Rs 337.3 crore for losses accruing from specific and general loans during the quarter, which was higher than Rs 273.2-crore provision made during the same quarter last year. The bank said its total deposits stood at Rs 1,33,781 crore at the end of the second quarter, which were about 47 per cent higher on a year-on-year basis.

The current account and savings account (CASA) base of the merged entity was measured at 44 per cent of total deposits at the end of the second quarter. At Rs 58,400 crore, the bank’s retail loans constituted about 54.7 per cent of the gross advances during the quarter.

The bank said its fees and commission have grown by about 50 per cent to Rs 587.3 crore during the quarter, while the total income rose by about 63 per cent at Rs 4,634.3 crore for the period.

The bank earned an interest of Rs 3,991.2 crore during the second quarter, which was about 69 per cent higher compared with Rs 2,362.8 crore for the corresponding quarter a year ago.

The net interest income (NII) for the bank rose 60.5 per cent to Rs 1,866.5 crore for the quarter, driven by average asset growth of 52.5 per cent.