HDFC Bank Q2 net up 30% on robust loan growth

Led by stronger loan growth, greater fee income and stable net interest margins, HDFC Bank, India's third largest bank, met forecasts with a 30 per cent rise in the net profit at Rs 1,559.98 crore in the July-September quarter as against Rs 1,199.35 crore in the corresponding period last year.

The bank's net interest income was up 26.7 per cent at Rs 3,731.7 crore. The non-interest income increased marginally to Rs 1,345.1 crore from Rs 1,211.7 crore during the second quarter this fiscal. Its core net interest margin stood at 4.2 per cent and the Q2 income moved up to Rs 9,869.8 crore from Rs 7,929.4 crore, it said.

Saday Sinha, banking analyst, Kotak Securities, said, "HDFC Bank has delivered yet another consistent quarter which they have doing so for almost last 10 years. The strong operating performance came on the back of healthy loan growth, exceptional NIM and superlative asset quality." HDFC Bank shares rose 0.96 per cent to Rs 630.40 on the BSE on Friday.

The bank's total balance sheet size increased by 19.5 per cent from Rs 3,15,746 crore in September 2011 to Rs 3,77,375 crore by September 2012. Total net advances were Rs 2,31,649 crore, an increase of 22.9 per cent over September 30, 2011.

The mix of loans between the retail and wholesale segments was 53:47 as on September 30, 2012.

The bank indicated that it may lower its base rate, the level below which it can't lend to customers. "We have to recalibrate our own base rate," said HDFC Bank executive director Paresh Sukhtankar. "We were one of the first banks to pass on the benefits to the customers after the first round of cut in cash reserve ratio."

Considered a safe investment for its robust quarterly performances, the bank saw asset quality remaining steady, with the ratio of net non-performing loans to net advances at 0.2 per cent as of end-September.

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