HDFC Bank profit up 23% to Rs 2,326 cr, lowest rise in 10 yrs

Mumbai: Hit by higher effective tax rate, private sector HDFC Bank today reported its decade's lowest profit growth of 23.1 per cent at Rs 2,326.5 crore for the January-March period of 2013-14.HDFC Bank had earned a reputation for delivering over 30 per cent profit growth for 37 straight quarters in the past 10 years (40 quarters).This is for the third straight quarter HDFC Bank's profit growth is falling below its targetted 30 per cent. For the October-December period, the bank's profit growth was 25 per cent at Rs 2,326 crore. In the preceding quarter, the rise was 27 per cent at Rs 1,982 crore. “What has caused a lower growth rate in the bottom-line, certainly for this quarter and every single quarter in the past financial year, has been the higher effective tax rate,” Sukthankar told reporters.He said profit before tax grew 31 per cent to Rs 3,493.2 crore, while the change in the effective tax rate, which has grown to 33.4 per cent as against 29 per cent in year-ago quarter, crimped the profit.He also attributed the slip to an additional surcharge of1.5 per cent introduced in the last budget.The key net interest income (interest earned less interest expended) grew 15.3 per cent to Rs 4,952.6 crore on a healthy credit growth, while the non-interest income was up by only 11 per cent to Rs 2,001.4 crore on sluggishness in the third-party sales.Sukthankar attributed the lower-than-expected fee income to the loss of appetite of investors in the insurance and mutual funds products, coupled with regulatory actions on the fees front.The bank was able to expand net interest margin, keyprofit gauge, by 0.16 per cent to 4.4 per cent on an uptick in the low-cost current and saving account deposits and deployment of the USD 3.4 billion deposits raised from overseas in September through November under the special RBI window, he said.“When you look at the financial results, and you need to look at all the financial parameters, We have delivered on the primary financial and operational parameters,” Sukthankar said, adding a loan growth in the high 20 per cent is possible only when GDP growth goes to the 7.5 to 8 per cent range can get PAT growth back to 30 per cent.(More) For the entire fiscal 2013-14, net profit jumped 26 per cent to Rs 8,478.4 crore. “HDFC Bank's numbers came largely in line with our expectations. Core performance was aided by 0.20 per cent q-o-q improvement in NIM along with strong loan growth,” Saday Sinha, banking analyst at Kotak Securitas, said.The HDFC Bank scrip closed up 1.36 per cent at Rs 726.35on the BSE, whose benchmark Sensex ended flat.On the asset quality front, gross non-performing assetsratio was flat at 0.98 per cent at Rs 2,989.3 crore, while the restructured assets continued to be at 0.2 per cent of the book.There was a decrease in the provisions for bad assets at Rs 286 crore as against the Rs 300 crore in the year-ago period.The commercial vehicle and construction equipment financing, which had been a sore area for a few quarters, is also stabilising, he said.Sukthankar said in signs of a recovery the incremental NPA formation has decelerated. He added that it cannot be said yet say whether bad assets have peaked or not.During the quarter, it clocked an advances growth of 21.8 per cent and 16.9 per cent in the deposits, excluding the deposits raised overseas and deployed. Sukthankar said after many quarters, the demand from the wholesale outpaced retail and the composition between the two now stands at 53:47 in favour of wholesale.The share of low-cost Casa deposits stood at 44.8 percent as of end March. He, however, said there has not been any “meaningful” increase in the greenfield capex demand from corporates. The capital adequacy ratio stood at 16.1 per cent, with the core tier-I at 11.8 per cent.When asked if the entry of new banks may put some pressure on the HR front, Sukthankar said the bank is not facing any such pressure right now.He also spurned market speculation that the bank is interested in buying out a merchant banking player, saying it is not looking at inorganic growth opportunities at present.The board recommended a dividend of Rs 6.85 per equity share of Rs 2 for the year as against Rs 5.5 per share for the previous year.

HDFC Bank profit up 23% to Rs 2,326 cr, lowest rise in 10 yrs

Mumbai: Hit by higher effective tax rate, private sector HDFC Bank today reported its decade's lowest profit growth of 23.1 per cent at Rs 2,326.5 crore for the January-March period of 2013-14.HDFC Bank had earned

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