HDFC Bank Q4 net jumps 33.2%

* Banks total income rises 24% to Rs 6,724.3 cr in the quarter from Rs 5,003.8 cr in the year-ago period.

With demand for credit and fee income rising,private sector lender HDFC Bank has reported a better-than-expected 33.2 per cent jump in net profit to Rs 1,114.70 crore for the fourth quarter ended March 2011 from Rs 836.62 crore in the same period of last year. The board of the bank has also recommended share split in 1:5 ratio.

The banks total income rose by 24 per cent to Rs 6,724.3 crore in the quarter from Rs 5,003.8 crore in the year-ago period,HDFC Bank said.

Net interest income (interest earned less interest expended) during the quarter was Rs 2,839.5 crore as against Rs 2,351.4 crore in the same period a year ago. This was driven by loan growth of 27.1 per cent and a core net interest margin (NIM) for the quarter of 4.2 per cent,the bank said.

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The board of HDFC Bank has proposed a dividend of 165 per cent or Rs 16.50 per share for the year ended March 31,2011. Besides,the board has approved sub-division of one equity share of face value Rs 10 into five shares of Rs 2 each and consequential alteration in the authorised share capital.

Giving a guidance of 3.9-4.3 per cent for net interest margin (NIM) in FY 12,HDFC Bank executive director Paresh Sukhtankar said the critical net interest margin component for the bank stood at 4.2 per cent in Q4 in spite of the pressure exerted on it due to rising deposit rates.

For the financial year 2010-11,the bank posted a net profit of Rs 3,926.30 crore,representing an increase of 33.10 per cent from Rs 2,948.6 crore in the previous year. The bank earned an income of Rs 24,263.4 crore in FY11 compared to Rs 20,155.83 crore in the previous fiscal. Consolidated net profit increased by 32.9 per cent to Rs 3,992.5 crore in 2010-2011.

The banks total balance sheet size increased by 24.7 per cent from Rs 2,22,459 crore as of March 31,2010 to Rs 2,77,353 crore as of March 31,2011. Recording a growth of 27.1 per cent total gross advances was at Rs 1,59,983 crore while total deposits grew by 24.1 per cent at Rs 2,08,586 crore.

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The component of the cheaper CASA (current and savings accounts) deposits in the total pie moved up to 51 per cent as of March 31,2011,as against the previous years 50 per cent,Sukhtankar said. He said he fears a cannibalisation of this component going forward in favour of the fixed deposits where the rates are rising.

The banks asset quality continued to remain healthy with gross non-performing assets as on March 31,2011 at 1.1 per cent of gross advances as against 1.4 per cent at the end of the previous year. The ratio of net non-performing assets to net advances as of March 2011 was at 0.2 per cent,down from 0.3 per cent as at March 31,2010.

The banks provisioning policies for specific loan loss provisions remained higher than regulatory requirements. The NPA coverage ratio based on specific provisions (not including write-offs,technical or otherwise) was at 82.5 per cent as on March 31,2011 while that on March 31,2010 was 74.8 per cent. Total restructured loans (including applications received and under process for restructuring) were at 0.4 per cent of gross advances of which 0.1 per cent were restructured loans classified as NPAs as on March 31,2011,it said.