The Hindu Business Line : HDFC Bank net rises 37% on higher income

Mumbai, April 24 HDFC Bank reported a 37-per cent increase in net profit at Rs 471 crore for the quarter ended March 31, 2008, against Rs 344 core in the corresponding quarter last year, on higher income.

The bank’s board of directors has recommended a dividend of 85 per cent for FY 2007-08, against 70 per cent last year.

Mr Paresh Sukthankar, Executive Director, HDFC Bank said, “The revenue growth has been strong overall. NII has been particularly strong at 55 per cent and other income too has been strong at 39 per cent.”

For the fourth quarter Net Interest Income was Rs 1,642 crore (Rs 1,055 crore).

Other income was Rs 549 crore (Rs 394 crore).

Net Interest Margin was 4.4 per cent, up from 4.3 per cent in the quarter ended December 2007.

Cost of deposits has gone up to 4.7 per cent (3.9 per cent).

Forex income down

Within other income, foreign exchange and derivatives revenues fell to Rs 60.4 crore (Rs 103.3 crore) mainly due to market conditions. “While the activity in foreign exchange transactions continues, derivatives transactions have come down. But not a large part of our revenue comes from this,” Mr Sukthankar said.

The bank has made substantially higher provisions and contingencies of Rs 465 crore (Rs 267 crore).

This comprises specific provisions for non-performing assets and general provisions for standard assets of Rs 293 crore and provisions for tax, legal and other contingencies of Rs 172 crore.

“The contingency provision is not for specific purposes. But some portion of it is for any loss, if at all, arising out of currency derivatives transactions, but we are not saying how much. In any case, we don’t have any large defaults. No case has been filed against us,” Mr Sukthankar said.

The bank has no exposure to any sub-prime paper as it has not overseas operations, he added.

Retail portfolio

In the retail portfolio, auto loans saw a growth of 36 per cent, credit cards grew by 54 per cent and personal loans grew by approximately by 47 per cent. The two-wheeler segment saw a fall of 25 per cent.

For the fiscal 2008-09, the bank is targeting a growth of 25-30 per cent, Mr Sukthankar said.

On Thursday, the scrip closed at Rs 1,446.15, up 0.23 per cent from Rs 1,442.85 on the BSE.