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HDFC Bank, India’s second largest private sector lender, reported a 23 per cent rise in net profit at ₹2,326 crore for the quarter ended March 2014 driven by robust loan growth and interest income.
This was the third consecutive quarter when the year-on-year rise in HDFC Bank's three-month net profit was below 30 per cent.
Paresh Sukthankar, Deputy Managing Director of HDFC Bank, said this year (FY15) will be better than the previous year in terms of the macro environment.
Net interest income (interest earned less interest expended) was up 15 per cent, while ‘other income’ rose 11 per cent.
The gross non-performing assets (NPA) ratio was flat at 1 per cent, while the net NPA ratio increased marginally to 0.3 per cent from 0.2 per cent as on March-end 2013.
“Asset quality has shown some stability over the last two quarters…The slippages are not likely to increase much as the sentiment has improved. However, there is no fresh capex demand (from companies) as of now,” Sukthankar said.
The bank’s recoveries increased 25 per cent to ₹195 crore during the quarter. “Perhaps, the second half (FY15) will see fresh capex loan demand and therefore growth in the wholesale book,” Sukthankar said.
As on March 31, 2014, total advances rose 26 per cent year-on-year, driven by growth in the corporate loan book at 37 per cent. Retail loans grew at 10 per cent due to slower growth in auto loans (7 per cent) and de-growth in commercial vehicle and construction equipment loans (-10 per cent) and gold loans (-19 per cent).
The domestic loan mix between retail and wholesale was at 53:47 from 55:45 a year ago.
Year-on-year deposits grew 24 per cent. Adjusted for the one-time increase in FCNR deposits ($3.4 billion), swapped with the RBI under the special window in the December quarter and related foreign currency loans, core deposits and advances grew 17 per cent and 22 per cent, respectively.
Even as net interest margin declined to 4.4 per cent from 4.5 per cent a year ago, sequentially, it increased from 4.2 per cent in Q3 FY14 due to growth in current and savings accounts and FCNR (B) deposits.
Full-year results In FY14, net profit increased 26 per cent to ₹8,478 crore as compared with ₹6,726 crore a year earlier.
The bank’s board proposed a dividend of ₹6.85 as against ₹5.5 per share to its shareholders.
HDFC Bank scrip ended at ₹726.35 per share, h1.36 per cent higher than the previous close on the BSE.
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