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

Moneycontrol Bureau

HDFC Bank aims to grow its loan book 3% or 4% higher than the 17% credit growth projected by the Reserve Bank of India for the industry in 2012-13, Paresh Sukthankar, Executive Director of the bank said in a conference call with press persons. While he is hopeful of a pick-up in corporate lending, Sukhthankar said the composition of loan book will remain in the ratio of 45:55 between corporate and retail segments, 

"Our deposit growth too would be higher than the industry average. It may be 3% or 4% lower than our credit growth. On the bulk deposit front, rates have already started cooling off. Retail deposit rates would come down sooner or later. There is fairly a downward movement in deposits," he said adding that banks will not cut lending or deposit rate in isolation but will slash them together.

During the quarter, HDFC Bank's cost of funds rose slightly  by 10 basis points. It has added 343 branches in the Jan-March quarter. The branch expansion has led to increase in its cost to income ratio, which is pegged at 49.8% as against 48.9% a year back.

The bank managed to retain its asset quality with the gross non-performing assets stabilising at 1% since last five quarters.

"Our overall non-performing liabilities have actually improved. There has been a marginal uptick in bad retail loans quarter-on-quarter basis. However, we are not expecting any strain from our retail assets. Retail book remains healthy," the ED told Moneycontrol.com.

During the year, the bank has restructured 0.40% of total asset book, stood at 1.95 lakh crore. The lender, according to Sukthankar, has referred 3 or 4 cases to corporate debt restructuring cell. There is no case for internal restructuring.

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

The bank's gold loan book has doubled from Rs 1,316 crore to Rs 3,018 crore. And while the RBI recently tightened norms for lending against gold, HDFC Bank is not worried.

"Our gold loan book forms only 2.8% of total retail advances (at Rs 1.07 lakh crore). Hence, we do not have any concentrated risk on this portfolio," Sukthankar pointed out.

HDFC Bank's share of current account and savings account (CASA) to total deposit fell to 48.4% compared with 51% a year back.

"Due to higher term deposit rates, customers chose to move their money from savings or current account to fixed deposit schemes. This led to reduction in CASA ratio," the ED explained.

 

Saikat Das

saikat.das@network18online.com