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Saturday , January 19, 2013
HDFC Bank net rises on consumer loans
Publication: Mint , Journalist:Joel Rebello
Edition:Mumbai/Delhi/Ahmedabad/Pune/Bangalore , Page No: 1, 3, Location: Bottom­Left , Size(sq.cms): 289
HDFC Bank net
rises on consumer
loans
BY JOEL REBELLO
joel.r@livemint.com
MUMBAI
H
DFC Bank Ltd, India's
most valuable private sec­
tor bank, said on Friday that
net profit in the fiscal third
quarter rose 30% as it lent more
to consumers and companies,
and earned higher interest and
non­interest income.
Net profit rose to Rs.1,859
crore, or Rs.7.80 per share, in
the quarter ended 31 December
from Rs. 1,430 crore, or Rs.6.10
per share, a year earlier, in line
with a Bloomberg estimate of
Rs. 1,829 crore based on an
analysts' poll.
Net interest income, or the
interest earned on loans minus
that paid for deposits, rose
22% to Rs.3,799 crore on a 24%
increase in loans. Non­interest
income rose to Rs.1,799 crore
from Rs. 1,420 crore, driven by
a 24% increase in fees and
commissions to Rs. 1,402 crore.
HDFC Bank attracted de­
mand for loans from individuals
in spite of slowing economic
growth and high interest rates
that have made consumers in
Asia's third biggest economy
wary of borrowing money from
banks.
Executive director Paresh Su­
kthankar said loan growth was
led by the retail sector, which
included auto loans, loans to
small businesses, credit cards
and personal loans.
"Retail loans grew 29% from
last year, higher than the 18.5%
growth seen in corporate loans.
We disbursed Rs.29,000 crore
of retail loans, of which
Rs.5,700 crore were loans to
small companies, Rs.4,000 crore
were auto loans, and Rs.3,700
crore each for commercial
vehicles and personal loans,"
Sukthankar said.
HDFC Bank's loan book mix
now is tipped in favour of retail
loans, which constitute 53% of
the loans, up from 52% last
year. Sukthankar said he ex­
pects retail loans to dominate
the loan mix should the bank
maintain its current pace of
growth.
"Our wholesale loans are
mostly made up of working
capital loans, which are short­
to medium­term, and capital ex­
penditure, which is sluggish in
the current context. With our
range of products and the dis­
tribution network we have, we
expect retail growth to be faster
in the next couple of quarters,"
he said.
The strong growth in retail
loans has also increased the
risk of non­performing loans
f o r t h e b a n k . T o t a l n o n­
performing loans increased to
Rs.2,432 crore in December
from Rs.2,133 crore in
September, up by Rs.299 crore,
largely on account of loans to
individuals.
"Eighty per cent of the new
bad loans have come from
retail products, especially
loans for commercial vehicles
a n d c o nstruction equipment.
But it is still lower than what
we have priced in," Sukthankar
said.
The increase in non­perform­
ing loans is nothing to be
alarmed about, said Hatim
Broachwala, an analyst at
Karvy Stock Broking Ltd.
"It is still very low for a bank
of HDFC's size. The bank has
done well because loan growth
has been stronger than
expectat i o n s o f 1 9­20%," he
said.
The bank's net interest in­
come "has been lower than
30% for a few quarters now,
but they have maintained a
30% growth
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