The bank reported increase in net revenues and an impressive 27.1% increase in net profit; both driven by healthy loan portfolio growth in retail and wholesale segments. However, a slight increase in bad loans is a worry
HDFC Bank, the country’s second largest private sector lender reported a 27.1% increase in its net profit during the second quarter due to healthy loan growth in retail and wholesale segments and higher net interest income.
For the quarter to end-September, the lender said its net profit increased 27.1% to Rs1982.3 crore even as its total revenues, including interest income, rose 18.1% to Rs6320.9 crore from Rs5353.7 crore, same period last year.
HDFC Bank said its net profit was driven by increased loan portfolio, in both retail and wholesale segments. A hike in tax surcharge from 5% to 10% caused net profit to dip.
Net interest income-NII (interest earned less interest expended) of the Bank for the second quarter, which accounted for 71% of net revenues, grew 15.3% to Rs4,476.5 crore from Rs3,881.9 crore a year ago period. At the same time, HDFC Bank said its net interest margin (NIM) was at 4.3% as against 4.4% for corresponding quarter ended 30 September 2012.
This loan growth was contributed by both retail and wholesale, with retail loans growing by 16.9% and wholesale loans by 15.0% resulting in a loan mix of 53:47 respectively. Advances as of 30 September 2013 were Rs2,68,617 crore, an increase of 16.0% over 30 September 2012.
The bank’s total capital adequacy ratio (CAR) as at September 30, 2013 stood at 14.6% as against a regulatory requirement of 9%. Of this, tier-I CAR was 9.9%. However, these numbers do not take into account the audited profits for the half year ended 30 September 2013. Had the same been included, the total CAR and tier-I CAR would have been 15.6% and 10.9% respectively.
The bank’s bad debt worsened a bit and it is a worry. Its gross non-performing assets (GNPAs) were at 1.09% of gross advances as on 30 September 2013, as against 1.04% as on 30 June 30, 2013 and 0.91 % as on 30 September 2012.
During the quarter ended September 2013, the bank acquired additional 27.8% stake in its subsidiary HDFC Securities Ltd (HSL). Post this acquisition, its stake holding in HSL was 89.9% as of September 30, 2013.
As at 30 September 2013, the total number of branches (including extension counters) and ATM network stood at 3,251 branches and 11,177 ATMs respectively.
At 3.20pm, HDFC Bank was 2.28% down at Rs652 on the BSE while the benchmark Sensex was marginally down at 20,531.
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