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HDFC Bank on Monday announced a sub-division of its shares in view of the drop in retail shareholding to below 10 per cent of the total shareholding.
The Rs 10 face value equity share will be split into five equity shares of Rs 2 each.
As of March-end 2011, retail (individuals) shareholding was at 9.13 per cent (9.60 per cent as of March-end 2010).
“With the stock price going up in absolute terms, the proportion of retail shareholding has gone down a little below 10 per cent. The sub-division of shares will make the stock affordable for retail investors,” said Mr Paresh Sukthankar, Executive Director, HDFC Bank, while announcing the bank's financial results.
The private sector bank's board has recommended a dividend of Rs 16.50 per share for FY2011 (Rs 12 per share for FY2010).
In the quarter ended March 31, 2011, the bank's net profit increased by 33 per cent to Rs 1,115 crore (Rs 837 crore in the corresponding quarter last year). The net profit for the financial year ended March 31, 2011, also rose by 33 per cent to Rs 3,926 crore (Rs 2,949 crore).
Mr Sukthankar attributed the profitability in the quarter to a 27 per cent growth in loan book and a 21 per cent increase in net interest income (interest earned less interest expended).
Due to higher cost of liabilities, the bank reported a lower net interest margin (NIM) of 4.2 per cent in the reporting quarter, against 4.4 per cent in the corresponding quarter last year.
Pointing out that the bank, in the last few years, has been recording NIM in the 3.9-4.3 per cent range, Mr Sukthankar said, there could be a 10-15 basis points either side movement in NIM in the current financial year, factoring in the interest rate trajectory.
On his outlook for loan growth in FY2012, he said, “In FY2011, our loan book grew by 27 per cent, while the industry average was 21 per cent. Our target will be to grow above industry average.”
Though low cost current account and savings bank account (CASA) deposits comprise 51 per cent of the bank's total liabilities, Mr Sukthankar said the rising term deposit rates could cannibalise savings bank deposits. “CASA of the banking system could come off a little. If the RBI increases key interest rates then there could be some change in deposit (term) rates,” he said.
HDFC Bank's scrip closed 1.89 per cent down at Rs 2,315.70 on the BSE, against the previous close of Rs 2,360.20
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