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Mumbai, July 19: High interest earnings from corporate as well as retail loans have pushed HDFC Bank’s net profit up to 34 per cent in the first quarter ended June 30, which is higher than analyst expectations.
Net profit shot up to Rs 811.71 crore from Rs 606.11 crore in the corresponding period last year.
Analysts had expected the country’s second largest private lender to post profits of around Rs 800 crore. The strong growth was driven by a good performance in core operations as reflected in the net interest income (NII).
The bank’s NII, which is interest earned minus interest paid on deposits, grew 29.4 per cent to Rs 2,401.1 crore, driven by an average asset growth of 23.2 per cent. Other income (non-interest revenue) was at Rs 939.9 crore, primarily contributed by fees and commissions, which rose nearly 15 per cent to Rs 745.7 crore from Rs 649.3 crore in the quarter ended June 30, 2009.
Provisions and contingencies came down to Rs 555 crore from Rs 658.8 crore in the year-ago period because of an improvement in asset quality.
Total balance sheet size grew 25.3 per cent to Rs 2,33,253 crore. Deposits grew 25.6 per cent to Rs 1,83,033 crore, with savings account deposits at Rs 53,869 crore and current account deposits at Rs 36,169 crore. The low-cost savings and current account deposits grew 37 per cent over the corresponding period last year. Savings and current account deposits make up over 49 per cent of total deposits as of June 30.
Gross advances rose 40.2 per cent to Rs 1,47,620 crore. Retail loans grew over 24 per cent to Rs 76,068 crore and constituted 51.5 per cent of total advances.
Among retail loans, auto constituted Rs 21,000 crore, housing, Rs 9,500 crore and personal advances around Rs 9,000 crore.
Of the total loan growth, around 10 per cent increase in advances came from “short-term, one-off movements in wholesale loans”, executive director Paresh Sukthankar said.
Moving ahead, the bank expects a better-than-industry growth in its advances and is optimistic of maintaining its net interest margin at 4.2-4.3 per cent.
