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The country's second largest private lender HDFC Bank has posted a 20 per cent rise in net profit for the October to December quarter at Rs 2,795 crore helped by healthy interest income, margins and loan growth.
The bank had reported a net profit of Rs 2,326 crore during the same period last fiscal.
“This quarter, we have seen relatively good retail pick-up as compared to wholesale. Capex (capital expenditure pick-up may take a couple of more quarters but we remain bullish on bankable infrastructure projects,” Paresh Sukthankar, Deputy Managing Director, HDFC Bank, said at a conference call post results.
Net interest income or difference between interest earned and expended grew 23 per cent to Rs 5,700 crore from Rs 4,635 crore in the year-ago period.
Other income (non-interest income) at Rs 2,535 crore was 31 per cent of net income driven by robust fee income and profit on sale of investments.
However, provisions towards bad loans rose 44 per cent to Rs 560 crore during the quarter from Rs 389 crore in the corresponding quarter ended December 31, 2013. Also, operating expenses increased 19 per cent to Rs 3,456 crore from Rs 2,895 crore.
Net interest margin for the quarter was at 4.4 per cent against 4.2 per cent in the corresponding quarter ended December 31, 2013.
Asset quality
Gross non-performing assets (NPA) as a percentage of total advances improved to 0.99 per cent of gross advances as on December 31, 2014 against 1.01 per cent as on December 31, 2013 and against 1.02 per cent as on September 30, 2014.
Net NPA was at 0.26 per cent against 0.3 per cent a year ago.
As on December-end, 2014, total advances grew 17 per cent on a yearly basis to Rs 347,088 crore contributed by domestic loan growth in both retail and wholesale segments with the domestic loan mix between retail: wholesale of 51:49.
Total deposits as of December 31, 2014 were at Rs 414,128 crore, an increase of 18.6 per cent over December 31, 2013.
Share sale
Earlier this week, promoters of HDFC Bank had diluted 0.7 per cent stake while raising Rs 9,766 crore by selling American Depository Receipts (ADRs) and India-listed shares via qualified institutional placement (QIP) in a likely largest follow-on offer by a private sector firm. The bank also made a fresh issuance of 8.6 crore shares.
The Deputy Managing Director, Sukthankar, said: “Both the issuances were priced at parity and we are happy with the kind of investors we got.”
After the share sale, HDFC Bank's promoter HDFC Ltd’s (Housing Development Finance Corporation) stake has been reduced to 21.7 per cent from 22.5 per cent earlier. On the other hand, foreign shareholding in the bank stands at 73.5 per cent (from 73.3 per cent) against the ceiling of 74 per cent.
Sukthankar said that if at some point, HDFC Ltd’s stake needs to be increased in the bank, a preferential allotment could happen.
On payment bank, he said the bank is not looking for any tie-ups right now but HDFC Bank itself will look at offering those products which will be allowed and offered by payment banks.
On Friday, the shares of HDFC Bank had closed at Rs 1,065.85 per share, down by Rs 11.75 (1.09 per cent) over the previous close on the Bombay Stock Exchange.
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