Strong growth in advances, particularly retail loans, and non-interest income helped HDFC Bank's net profit rise 30 per cent to Rs 1,453 crore for the fourth quarter ended March 2012 from Rs 1,115 crore in the same quarter last year.
For the full year 2011-12, the net profit rose 32 per cent to Rs 5,167 crore against Rs 3,926 crore in 2010-11. The bank declared a dividend of Rs 4.3 on shares having face value of Rs 2. Net interest margin, at 4.2 per cent, was the largest driver of profits, said Mr Paresh Sukthankar, Executive Director.
Strong growth in CASA (Current Account/Savings Account) and retail loans, that yield more than corporate loans, helped the bank maintain its margins, Mr Sukthankar said.
Both retail and corporate loans would grow at more or less the same pace. In the retail segment, there could be some moderation in auto and commercial vehicle loan that is dependent on the performance of the underlying industry, Mr Sukthankar said.
Within ‘other income', fees and commissions were the largest contributor, while fees from distribution of third party products dipped.
There could be a reduction in deposit rates over the next few weeks or couple of months. This would be simultaneously followed by a cut in base rates, he said.
“Retail fixed deposit rates will not come off immediately. The only immediate reaction to the RBI's action is seen in bulk deposit rates at the shorter end. Deposit rates will depend on market conditions as competition is intense.”
While lending rates would also see a downward movement, the pace of decline would be faster in corporate loans at the shorter end, he added. Loan quality was stable with the bank having made floating provision of Rs 700 crore for the full year. Restructured loans account for 0.4 per cent of total loans.Cost-to-income ratio rose to 49.8 per cent (48.8 per cent) due to expenses on new branches and ATMs.