Aided by a strong growth in advances, particularly retail advances, and lower provisioning due to improvement in asset quality, HDFC Bank's net profit increased by 31 per cent to Rs 1,430 crore in the quarter ended December 31, 2011.
The net profit in the corresponding year-ago period was Rs 1,087crore.
Though there was strong growth in advances across sectors, retail advances grew at a faster pace than wholesale, said Mr Paresh Sukthankar, Executive Director, HDFC Bank.
Wholesale, retail advances
Wholesale advances grew by 15 per cent, while retail advances grew by 29 per cent.
“We cut back some short-term corporate loans in order to avoid the mismatch between the yield on these loans and the cost of short-term deposits. We are active in trade finance and transaction banking, where there is demand. But there is some slowdown in term loans and infrastructure financing,” he said.
Of the wholesale loans, 75 per cent of them are medium and short term, while the rest are long-term loans.
The proportion of retail loans and wholesale loans in total loans was 51 per cent and 49 per cent respectively.
The cost of funds went up by 130 basis points over the previous year's quarter, while yield on advances went up by 120 basis points. This helped the bank to maintain stable Net Interest Margin.
Within other income, fees and commissions went up by 20 per cent to Rs 1,128 crore. The bank suffered a loss of Rs 82 crore (loss of Rs 31 crore) on account of revaluation or sale of investments.
Provisions and contingencies were lower at Rs 329 crore (Rs 466 crore).
As asset quality was stable, on a year-on-year basis, the need for specific provision has come down, Mr Sukthankar said. The total loan loss provision was Rs 289 crore. Of this, Rs 140 crore was general and floating provision.
With the expansion in branches and ATMs, operating expenses increased by 18 per cent to Rs 2,158 crore. The total number of branches as on December 2011 was 2201 and ATMs was 7110. Of the new branches added, 341 are in new cities, Mr Sukthankar said.
Share of CASA
The share of CASA (current and savings accounts) to total deposits was around 48 per cent. The savings bank accounts were at Rs 70,330 crore as on end-December.
Going ahead, the bank expects advances and deposits to grow at a slightly higher rate than the industry average, Mr Sukthankar said.
Shares of HDFC Bank closed at Rs 485, up 0.98 per cent, on the BSE, on Thursday.