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Robust loan growth and other income propelled HDFC Bank’s net profit up 21 per cent to ₹2,807 crore in the fourth quarter ended March 31, compared with ₹2,327 crore in the year ago period.
India’s second largest private sector bank crossed the milestone of ₹10,000 crore in net profit for the full year.
It reported 20.5 per cent increase in net profit at ₹10,216 crore as against ₹8,478 crore in the previous year.
The bank’s board of directors recommended a dividend of ₹8 per equity share of ₹2 for FY2015.
Net interest income In the reporting quarter, HDFC Bank’s net interest income was up 21 per cent at ₹6,013 crore (₹4,953 crore).
Other income, which includes fees and commissions, foreign exchange and derivatives revenue, gain on revaluation/ sale of investments, rose 28 per cent to ₹2,564 crore (₹2,001 crore).
The higher profitability comes despite increase in specific loan loss provisions (at ₹425 crore vs ₹320 crore) and general provisions (₹118.5 crore vs ₹27.6 crore).
CASA deposits Net interest margin (the excess of interest income over interest expense scaled by total assets) was stable at 4.40 per cent. NIM gives an indication of how effectively banks deploy their funds to generate income from credit and investment operations.
The bank recorded a 21 per cent year-on-year loan growth at ₹3,65,495 crore as at March-end 2015.
Retail and wholesale loans grew by 22 per cent and 18 per cent, respectively. Total deposits were up by 23 per cent at ₹4,50,796 crore.
As a percentage of total deposits, current account and savings account (CASA) deposits were lower at 44 per cent as against 44.8 per cent a year ago.
According to Paresh Sukthankar, Deputy Managing Director, deposit and loan growth were in tandem for HDFC Bank in FY2015.
The bank will continue to have NIM of 4.4 per cent.
If GDP picks up, then the banking system will see loan growth of 13-14 per cent in FY2016, Sukthankar said and added that his bank, however, will clock loan growth that is 4-6 per cent above the industry average.
Branch expansion In an indication that competition is hotting up in the banking space following the acquisition of ING Vysya Bank by Kotak Mahindra Bank and the imminent entry of new banks – private sector banks, small finance banks and payments banks — HDFC Bank ramped up its branch network by 611 in FY2015 to 4,014 branches.
HDFC Bank shares closed at ₹1,013.50 a share, down 0.14 per cent, on the BSE on Thursday.
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