HDFC Bank 1H after tax profit up 49% to Rs. 276 m

Friday, 21 August 2015 00:23 - - {{hitsCtrl.values.hits}}

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Housing Development Finance Corporation Bank of Sri Lanka (HDFC Bank) has recorded Rs. 388.9 million profit before tax (PBT) in the 1H of the year 2015 as against Rs. 310.5 million in the corresponding period of 2014, an increase of 25%. The profit after tax (PAT) had been Rs. 276.2 million as against Rs. 185.1 million, an increase of 49%. The interest income has increased from Rs. 2118 million to Rs. 2260 million, an increase of 6.7%. The net interest income of the bank has increased from Rs. 856.3 million to Rs. 1,050.6 million, an increase of 22.7%.

The interest expenses have been reduced to Rs. 1209.9 million from Rs. 1262.2 million due to re-pricing of deposits. The Operating Expenses has increased to Rs. 622.2 million from Rs. 513.5 million, an increase of 21% due to additional staff costs and expenditure incurred due to branch expansion. This was revealed by HDFC Bank Chief Executive Officer/GM Nimal Mamaduwa in a press release announcing the bank’s 1H year 2015 results.

The bank’s customer deposit base increased from Rs. 24.5 billion to Rs. 26.1 billion during the first six months, an increase of 6.8%. The loan book increased from Rs. 23.3 billion to Rs. 24.6 billion, an increase of 5.2%. The Return on Assets (ROA) stood at 2.71% as against 2.51% as at 31 December 2014, whilst the Return on Equity (ROE) increased from 13.7% to 18.3%. The bank’s T1 capital and Total Capital Adequacy Ratio stood 13.08% and 12.29% respectively which are well within the regulatory requirements, although the ratios have been marginally reduced due to the credit growth shown in the first half of 2015. The bank also maintains a healthy statutory liquid asset ratio of 30.6% as against the regulatory requirement of 20%.

During the first half year of 2015 the bank was able to establish two new branches in Polonnaruwa and Kiribathgoda under the branch expansion program thereby making the total network to 38 branches. It will continue to expand its branch network as we believe that there are still many unbanked people in rural areas. The bank’s intention is to increase the branch network to cover the entire country and explore the potential to increase the volumes of unbanked being ushered into the formal sector. It is working closely with divisional secretariats and other government agencies through our branches to identify new growth areas and reach communities which are underserved in terms of formal financial solutions.

The bank’s strategy of diversifying their product portfolio initiated in the year 2013 delivered significant gain in terms of growth and profitability. The product diversification was focused on the launch of several micro finance solutions to extend micro housing loans which has helped the beneficiaries to improve and upgrade their shelter into a liveable home and improving their standard of living.

The bank has entered into MOUs with CBSL in implementing several loan schemes such as Prosperity Loan Schemes (Saubhagya) for the purpose of providing credit facilities for agriculture, livestock, micro, small and medium scale enterprises and Commercial Scale Dairy Development Loan Scheme (CSDDLS). These schemes have been satisfactorily utilised through their branch network.