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Should be able to maintain margins at 3.9-4.3%: HDFC Bank

On Monday, private sector lender HDFC Bank beat analysts estimates by announcing a 33.2% (year-on-year) rise in its net profit for the fourth quarter (January-March) of Fiscal year 2011. Aided by a strong loan-book growth and higher fee-based income, the bank posted a profit of Rs 1,114.7 crore.

April 19, 2011 / 03:09 PM IST
 
 
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On Monday, private sector lender HDFC Bank beat analysts estimates by announcing a 33.2% (year-on-year) rise in its net profit for the fourth quarter (January-March) of fiscal year 2011. Aided by a strong loan-book growth and higher fee-based income, the bank posted a profit of Rs 1,114.7 crore. Its quarterly net interest income was up 20.8% from a year ago to Rs 2,839.5 crore.


Detailing the bank's performance during the quarter its executive director Paresh Sukthankar said incremental non-performing asset (NPA) formation in retail loans was lower with muted results from the corporate loans side. The bank, he said also made contingent provisions against microfinance loans.


Talking about how the future looks he seems confident of growing on an organic basis. "We don't need an acquisition to deliver core growth expectations. The bank should be able to maintain margins at 3.6-4.3%."

On the long-standing tussle between the government and microfinance institutions, Sukthankar says the pain in the industry should be shared by MFIs and banks or absorbed by banks alone. "Microfinance loans are likely to become NPAs going forward," he adds.

first published: Apr 19, 2011 12:08 pm

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