HDFC Bank‘s Net Profit Rises 30%, Asset Quality Remains Stable In Q4FY13
Suparna / 23 Apr 2013
In the elapsed quarter, HDFC Bank has notched up a good set of numbers, with its net profits shooting up strongly by 30% and its total income rising by 21%.
India's second largest private sector bank, HDFC Bank, has put up a stellar result once again. The bank posted a net profit of Rs 1889.8 crore for the quarter ending March 2013, which is up by 30% compared to that of Rs 1453 crore it posted in the March 2012 quarter.
This increase in the total profit was aided by a 21.1% increase in its total income in the same period to Rs 11127.5 crore. For the quarter ended March 31, 2013, the bank’s Net Interest Income (NII), which is the total interest earned less the total interest expended, grew by 20.6% to Rs 4295.3 crore as against Rs 3561.3 crore for the previous year same quarter. The rise in its NII was supported by higher than industry average loan growth of 22.7% and healthy net interest margins (NIMs). The bank logged a core NIM of 4.5% for Q4FY13 as compared to 4.4% for the same quarter last year.
The Other Income saw tepid growth of 10% on a yearly basis to Rs 1803 crore. This resulted in lowering of the share of Other Income as a part of its total income from 17.7% in Q4FY12 to 16.2% for Q4FY13.
The bank’s operating expenses have increased by 17.7% on a yearly basis to Rs 3136.2 crore. This led to a marginal increase in the Cost-to-Income ratio, which rose to 51.4% (as against 51.3%).
Despite showing such healthy growth in the loan book, the asset quality has improved. For the said quarter, the Gross NPAs of the bank were at 0.97% (1.02%) and the Net NPAs remained at 0.2%. The Provision Coverage Ratio also came in at 80%, which was much above the RBI’s prescription of 70%.
It has also seen an improvement in its Capital Adequacy Ratio (CAR). According to the Basel II guidelines, the bank's CAR stood at 16.8% for Q4FY13 against 16.5% for Q4FY12.
Currently, HDFC Bank's shares are trading at a price to book value of 5x, which fairly discounts the bank's performance.
The company has also proposed a dividend of Rs 5.50 per share, which means a yield of approximately 1% at the current price of Rs 689.
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