Reduction in gross NPAs to Rs 2,989.28 crore
HDFC Bank, third largest lender by assets, reported a 23 per cent rise in net profit to Rs 2,327 crore for the fourth quarter ended March 31, 2014 driven by robust other income and lower provisions. But the growth in net profit was the slowest in more than a decade, according to data compiled by Reuters.
The bank continued to maintain a stable asset quality. Provisions were down to Rs 286.13 crore as compared to Rs 388.84 crore. Provisions, gross NPA and restructured loans accounting for only 0.2 per cent of gross advances signal a robust balancesheet. There is a reduction in gross NPA from Rs 3,017.84 crore in December 2013 to Rs 2,989.28 crore. Net NPA in absolute terms, however, has increased from Rs 797.34 crore to Rs 820.03 crore during the same period, both being 0.3 per cent of net advances.
Paresh Sukhthankar, deputy MD, HDFC Bank said in a conference call, “We have managed the portfolio well to keep our bad loans under check. There are no greenfield projects and most firms’ postponement of their investment decisions till after polls have resulted in muted demand for credit. But we have a well-rounded growth in our retail and corporate portfolios.”
Net interest income, the difference between interest earned and interest expended, rose 15.3 per cent to Rs 4,953 crore in the three months to March, the bank said on Tuesday. Low-cost current and savings account (CASA) amounted for 44.8 per cent of the bank's deposits. Access to these low cost funds and deployment in high yielding retail loans is the primary reason why HDFC Bank is able to generate high net interest margin of 4.4 per cent as compared to 4.2 per cent in the previous quarter.
Rahul Shah, vice president - equity advisory group, Motilal Oswal Securities said, “Asset quality is one of the best in the industry, although stress in a few segments of retail loans needs to be watched. On the back of healthy retail business, strong capitalisation (risk of dilution low) and liability franchise (emerge stronger in the upturn of economy), management’s stability, P&L strength (to absorb credit cost risk) and those who have recognised stress upfront (risk of setback remains low).”
HDFC, which has outperformed rival banks with consistently high profit growth of about 30 per cent and stable asset quality, is seeing its profit growth weaken in the past three quarters as loans and fee incomes grew at a slower pace.
Though retail loans still account for 53 per cent of all advances, HDFC Bank in the March 2014 quarter saw growth coming in from wholesale banking. Advances increased by 26.4 per cent during the year while deposits increased by 24 per cent.
The HDFC stock was up 1.36 per cent at Rs 726.35 a piece on the Bombay stock exchange.
This article taken from mydigitalfc : http://www.mydigitalfc.com/news/hdfc-bank-q4-profit-23-rs-2327-cr-533
HDFC Bank, third largest lender by assets, reported a 23 per cent rise in net profit to Rs 2,327 crore for the fourth quarter ended March 31, 2014 driven by robust other income and lower provisions. But the growth in net profit was the slowest in more than a decade, according to data compiled by Reuters.
The bank continued to maintain a stable asset quality. Provisions were down to Rs 286.13 crore as compared to Rs 388.84 crore. Provisions, gross NPA and restructured loans accounting for only 0.2 per cent of gross advances signal a robust balancesheet. There is a reduction in gross NPA from Rs 3,017.84 crore in December 2013 to Rs 2,989.28 crore. Net NPA in absolute terms, however, has increased from Rs 797.34 crore to Rs 820.03 crore during the same period, both being 0.3 per cent of net advances.
Paresh Sukhthankar, deputy MD, HDFC Bank said in a conference call, “We have managed the portfolio well to keep our bad loans under check. There are no greenfield projects and most firms’ postponement of their investment decisions till after polls have resulted in muted demand for credit. But we have a well-rounded growth in our retail and corporate portfolios.”
Net interest income, the difference between interest earned and interest expended, rose 15.3 per cent to Rs 4,953 crore in the three months to March, the bank said on Tuesday. Low-cost current and savings account (CASA) amounted for 44.8 per cent of the bank's deposits. Access to these low cost funds and deployment in high yielding retail loans is the primary reason why HDFC Bank is able to generate high net interest margin of 4.4 per cent as compared to 4.2 per cent in the previous quarter.
Rahul Shah, vice president - equity advisory group, Motilal Oswal Securities said, “Asset quality is one of the best in the industry, although stress in a few segments of retail loans needs to be watched. On the back of healthy retail business, strong capitalisation (risk of dilution low) and liability franchise (emerge stronger in the upturn of economy), management’s stability, P&L strength (to absorb credit cost risk) and those who have recognised stress upfront (risk of setback remains low).”
HDFC, which has outperformed rival banks with consistently high profit growth of about 30 per cent and stable asset quality, is seeing its profit growth weaken in the past three quarters as loans and fee incomes grew at a slower pace.
Though retail loans still account for 53 per cent of all advances, HDFC Bank in the March 2014 quarter saw growth coming in from wholesale banking. Advances increased by 26.4 per cent during the year while deposits increased by 24 per cent.
The HDFC stock was up 1.36 per cent at Rs 726.35 a piece on the Bombay stock exchange.
This article taken from mydigitalfc : http://www.mydigitalfc.com/news/hdfc-bank-q4-profit-23-rs-2327-cr-533
