HDFC Bank Q2 profit rises 27% to Rs 1982cr, NII disappoints

Moneycontrol Bureau

HDFC Bank's second quarter (July-September) net profit rose 27 percent -- higher-than-expected -- to Rs 1,982 crore, compared to a year ago period led by higher other income. However, NPAs of the bank increased during the quarter. Net interest income of the country's second largest private sector lender jumped 15.3 percent to Rs 4,476 crore in September quarter from Rs 3,732 crore in a year ago period, which was below the analysts' forecast. A CNBC-TV18 poll had estimated net profit at Rs 1,963 crore and net interest income at Rs 4,576 crore for the quarter. Other income, which includes commission, fees, foreign exchange earnings, earnings from derivative transactions etc, surged 25 percent year-on-year to Rs 1844.35 crore during July-September quarter. The bank witnessed a loss on mark-to-market (MTM) basis investment at Rs 173 crore, which has not been amortised, says Paresh Sukthankar, executive director of HDFC Bank. Non-performing assets (NPA) of the lender increased in the quarter gone by. Gross NPA of gross advances rose to 1.09 percent in second quarter as against 1.04 percent in first quarter and 0.91 percent in a year ago period. Net NPA was unchanged at 0.3 percent compared to previous quarter, but it has risen compared to 0.2 percent in corresponding quarter of last year. Gross NPA climbed to Rs 2,941.7 crore during the quarter from Rs 2,719 crore Q-o-Q and Rs 2,133.44 crore Y-o-Y while net NPA increased to Rs 767 crore in Q2FY14 from Rs 689 crore in June quarter and Rs 386.86 crore Q2FY13. The bank says, "Total restructured loans (including applications received and under process for restructuring) were at 0.2 percent of gross advances as of September 30,2013 as against 0.3 percent as of September 30,2012." Provisions and contingencies for the September quarter stood at Rs 386 crore as against Rs 527 crore Q-o-Q and Rs 389.91 crore Y-o-Y. Net interest margin fell by 30 basis points to 4.3 percent in second quarter from 4.6 percent in June quarter. Deposits of the bank grew 14.2 percent year-on-year to Rs 3.13 lakh crore while advances rose 16 percent on yearly basis to Rs 2.69 lakh crore as of September 30, 2013. "The loan growth was contributed by both segments of the bank loan portfolio, with retail loans growing by 16.9 percent and wholesale loans by 15 percent resulting in a retail:wholesale loan mix of 53:47. Savings account deposits grew 17.9 percent over the previous year to reach around Rs 93,285 crores. The CASA ratio as at September 30,2013 was 45 percent," the bank said in its filing. Tax expenses increased to Rs 1,018.42 crore in September quarter from Rs 935.13 crore in June quarter and Rs 718.44 crore in a year ago period. Total number of branches (including extension counters) and ATM network stood at 3251 branches and 11177 ATMs, respectively. Meanwhile, the bank acquired additional 27.8 percent stake in its subsidiary HDFC Securrties (HSL) during the September quarter. Post this acquisition, the bank's stake holding in HSL was 89.9 percent as of September 30, 2013. At 14:30 hours IST, the stock fell 1.24 percent to Rs 658.90 amid high volumes on the Bombay Stock Exchange.