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HDFC Bank delivers yet another steady quarter
Rex Mathew
18 October 2006

The "30-per cent bank" has done it yet again! As for the last many quarters, HDFC Bank has once again delivered quarterly bottom line growth of around 30 per cent for Q2 06-07. The results are in line with market expectations.

For the quarter ended 30 September 2006, net profits of HDFC Bank has increased by 31.71 per cent to Rs262.94 crore, or Rs8.3 per share, from Rs199.64 crore, or Rs6 per share, for the previous year quarter.

Gross income increased by a substantial 58.48 per cent to Rs2,033.37 crore from Rs1,283.05 crore for the same quarter of previous year. Gross interest income went up by 59.9 per cent to Rs1,635.66 crore for the quarter from Rs1,022.9 crore a year ago.

Interest expended jumped 92.34 per cent to Rs790.06 crore from Rs410.77 crore. Net interest income (total interest earned less total interest expended) increased by a lower 38.14 per cent to Rs845.6 crore from Rs612.13 crore, as a result of the rising cost of funds for the bank.

Fee-based income and other income went up by 52.88 per cent to Rs397.71 crore from Rs260.15 crore for the previous year quarter. Of this, fee & commissions contributed Rs314.1 crore, Rs58.2 crore came from foreign exchange and derivatives while the remaining Rs20.6 crore was profits from sale of investments.

Operating profits went up by 41.12 per cent to Rs664.18 crore from Rs470.64 crore a year ago. Staff costs were higher by 57.46 per cent at Rs181.33 crore while other operating expenses went up by 38.86 per cent to Rs397.8 crore.

Provisions for NPA's and contingencies saw a sharp rise of 69.26 per cent to Rs305.71 crore from Rs180.62 crore for the previous year quarter. Of this, provisions for standard and non-performing assets were Rs220.7 crore while Rs57.6 crore was provided for securities in the held-to-maturity category. Tax provisions went up by 5.7 per cent to Rs95.53 crore.

The bank management said average asset growth during the quarter was around 40 per cent. Core net interest margin was steady at around 4 per cent – the highest among Indian banks. Capital adequacy ratio as at the end of the second quarter stood at 12.1 per cent as compared to 10.4 per cent a year ago, after the bank raised Rs741 crore by issuing tier-I and tier-II bonds.

Total customer assets - including advances and investments in securities issued by corporate - increased 34.2 per cent to Rs49,326 crore from Rs36,764 crore. Retail loans, which now form 56 per cent of gross advances, expanded 44.4 per cent to Rs25,211 crore. Non-performing assets were just 0.4 per cent of total customer assets - one of the lowest among domestic banks.

send this article to a friend Deposits went up by 39.6 per cent to Rs63,447 crore from Rs45,446 crore. Of this, 52 per cent were savings and current account deposits – helping the bank to keep its cost of funds low.

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HDFC Bank delivers yet another steady quarter