The Hindu Business Line : HDFC Bank net up 30% on rise in fee, interest income

HDFC Bank posted a net profit of Rs 263.2 crore for the fourth quarter ended March 31, 2006, up 30 per cent from Rs 202.3 crore in the year ago quarter on account of rise in fee income and interest income, said Mr Paresh Sukthankar, Head, Credit and Market Risk, HDFC Bank.

The bank has recommended a dividend of 55 per cent or Rs 5.5 per share.

Net interest income was Rs 739.4 crore (Rs 513.58 crore). The total income increased to Rs 1,682.7 crore (Rs 1,087.3 crore).

Other income was Rs 304.2 crore (Rs 220 crore). This comprised mainly of fees from third party products and card business on the retail side and cash management and trade services on the wholesale side.

The income from the sale of non-Government securities from the Allowed For Sale portfolio fell by Rs 86.8 crore, against a profit of Rs 20.5 crore last year.

"The securities in the AFS portfolio are marked to market. The value of these securities turned negative due to the sharp increase in short-term yields in the debt market in March 2006," Mr Sukthankar said.

Capital adequacy fell to 11.4 per cent from 12.2 per cent. The ratio of net NPAs to total assets was 0.4 per cent.

For the full year the bank posted net profit of Rs 870.7 crore, against Rs 665.5 crore. Total income increased to Rs 5,599.32 crore (Rs 3774.83 crore). Interest income increased to Rs 2,545.84 crore (Rs 1,777.93 crore).

Total deposits were at Rs 55,796.82 crore, up 53 per cent (Rs 36,354.25 crore).

The percentage of low cost deposits (savings and current account deposits) grew to 55 per cent of total deposits.

Securitisation

Gross advances grew 48.1 per cent to Rs 38,412.6 crore (Rs 25,937 crore). Retail advances grew 79 per cent to Rs 21,231 crore (Rs 11,817 crore).

One reason for the high growth in retail loans was the lower quantum of securitised loans in 2005-06 as against 2004-05.

"This was a conscious decision. Under the revised guidelines the capital raised through securitisation is blocked. The one main advantage is not available anymore. So it is not as attractive as earlier," Mr Sukthankar said.

Going ahead the bank would look at securitisation only if the guidelines or market conditions changed, he said.

The bank saw 60 per cent growth in its agri-business through products like Kisan Gold Card, supply chain management and so on.

Mr Sukthankar said, "As we are in second and third line cities, SME and small business will grow further. Also, we provide the whole range services for SMEs and not just lending."

In 2005-06, the bank raised Tier II capital of Rs 788 crore and Rs 1,202 crore through unsecured subordinated bonds. It could raise further Tier II capital based on needs and market conditions.

HDFC Bank shares ended at Rs 815.5 on the BSE against the previous close of Rs 806.3, a rise of Rs 1.14 per cent.

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