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Apr 19, 2012, 05.15 PM IST | Source: Moneycontrol.com

Q4 Results 2012: HDFC Bank Q4 net jumps 30% on strong loan growth

India's second largest private sector lender, HDFC Bank's fourth quarter (Jan-March) net profit rose more than 30% year-on-year to Rs 1,453 crore on the back of robust loan growth. The numbers are in line with the market expectation. Net interest income however, increased to a forecast beating 19.30% y-o-y to around Rs 3,400 crore.

Moneycontrol Bureau

There is a good reason why HDFC Bank shares have been consistent outperformers despite analysts' contention that the stock is fairly-valued (which is a polite way of saying the share is over-valued).

HDFC Bank, India's second largest private sector lender, on Wednesday reported a 30% year-on-year growth in fourth quarter (Jan-March) net profit to Rs 1453 crore, driven by a strong growth in loan book and fee-based income. The figure was in-line with what most analysts had estimated. Net interest income (the difference between interest earned and interest paid out) jumped 19.3% to Rs 3388 crore, driven by loan growth of 22.2% at Rs 1.95 lakh crore.

Over the last 12 months, HDFC shares have gained around 15%, compared to a 9% decline each in the Sensex and the sector benchmark Bank Nifty.

During the quarter, lower provisioning and higher other income too added to the bank’s profits. Other income, a big chunk of which comprises fees and commission,  rose 19% YoY to Rs 1,492 crore, while provisions and contingencies (including specific loan loss and floating provisions of Rs 292 crore) dropped 31% YoY to Rs 298 crore.

For the full fiscal year, the bank's net profit rose at a littler higher pace by nearly 32% to Rs 5,200 crore. During the year, the bank’s loan book expanded 22% YoY to Rs 1.95 lakh crore. This growth is significantly higher than the average industry non-food credit growth of 16.80% in 2011-12.

Moreover, the retail loans surged up 34% YoY to Rs 1.07 lakh crore.  Loans against commercial vehicle and construction equipment has shot up 60% YoY to Rs 13,000 crore while the share of gold loans more than doubled from Rs 1,316 crore to Rs 3,018 crore.

Also read: HDFC Bank: Loans to grow 20-21%, sees no strain from retail assets

At the same time, the lender managed to retain its asset quality. The gross non-performing asset (NPA) ratio stood at around 1%. Since last five quarters, the bank has been reporting almost the same gross NPA ratio. Net NPA ratio too remained unchanged at 0.20%. This suggests, the asset quality has stabilized.

The bank’s deposits too grew more than 18% YoY to Rs 2.47 lakh crore as compared to 13% YoY growth for the entire industry in 2011-12. The share of current account and savings account (CASA) to total deposits stood at 48.4%.

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