HDFC Bank records 124% growth in 9-month profits

HDFC Bank recorded an impressive growth in after tax profits by 124% in the nine months ended as at 30 September 2010.

The bank has recorded a profit after tax of Rs. 125 million for this period against y-o-y profit of Rs.56 million recorded for the 3Q of 2009. The total income of the bank grew by 4% to Rs.1.8 billion for the nine months against Rs. 1.7 billion recorded on the same period for 2009.The marginal growth is attributable to the declining scenario on interest rates on advances, in line with the market rates.

The group profit has also improved from an impressive Rs. 294 million up to 30.09.10, against 104 million recorded up to 30.09.09. This is a yoy growth of 181%. The EPS also reflects a growth of 124% for the same period. The profit recorded by the bank is after provision of Rs. 120 million for its fully-owned subsidiary.

In the first nine months of 2010 the bank also recorded an impressive growth of 16% in fixed deposits and phenomenal growth of 40% in savings in the current year. Non-interest income has also improved by 129% for the same period.

Loan disbursements

The loan applications processed have increased from 35% to 5037 with 76% growth in disbursements amounting to Rs. 1.5 billion for the first nine months operations against 3741 applications amounting to Rs. 831 million for the same period in 2009.

The falling interest rates and the expansion of branch net work have contributed to the extraordinary growth in advances, which is also reflected in the industry. Despite this growth, the loan portfolio grew only by 3% due to the loan recoveries, during this same period.

Improvement in recoveries

The non-performing assets declined by an impressive Rs. 279 million (net of EPF ) in the first nine months from Rs. 1157 million in 3Q of 2009 to Rs.879 million in 3Q in 2010.This is a decline of the net NPL ratio to 10.3 % from 13.18% recorded in the 3Q of 2009.

Efficient recovery procedures adopted by the Bank and the reduction in the interest rates have contributed to the satisfactory decline in the NPLs, which amounts to a YOY reduction of 24%. The bank has relocated four branches in 2010 to provide better facilities to its customers and hopes to open a new branch in Trincomalee before 31 December 10. It has also connected to the Sampath Bank ATM Net Work giving a wider access to an ATM net work of 228.

The bank is undoubtedly moving steadily towards its main vision, which is to become a dominant player in the financial services sector by delivering innovative solutions to meet the needs for housing finance with a superior service, creating long-term shareholder value and contributing towards the economic development of the country.