Mumbai: Helped by control over operational costs and wholesale advances, HDFC Bank on Friday reported 25.1 per cent jump in net profit at Rs 2,325.7 crore for the third quarter of 2013-14 fiscal.
This is, however, the second consecutive quarter when the bank's profit growth has come in below the 30 per cent mark.
The country's second largest private lender, which had posted 30 per cent jump in net profit for every quarter for over a decade, had reported post-tax net of Rs 1,859.07 crore in the third quarter of 2012-13 fiscal.
HDFC Bank's Deputy Managing Director Paresh Sukthankar said however that the lender does not have any fixation for the 30 per cent growth number and stressed that its profits are a function of conditions in the economy.
During the October-December quarter of 2013-14, the bank's operating expenses grew only by 3.8 per cent to Rs 2,895.1 crore, which helped compress the cost-to-income ratio to 42.7 per cent as against 47.2 per cent in the year-ago period.
Sukthankar said this could be achieved largely on the back of productivity gains and some "short-term tactical" moves, not at the cost of branch expansion.
The bank has opened 274 branches last year (rpt) last year.
He said, however, the number of employees has declined over the last 12 months in spite of the network expansion.
HDFC Bank's net interest income- the gap between interest earned and paid out - grew 16.4 per cent to Rs 4,634.8 crore in Q3, while the non-interest income was up 11.4 per cent to Rs 2,48.3 crore.
Net interest margin compressed by 0.1 per cent to 4.2 per cent. Sukthankar said it suffered 0.16-0.17 per cent impact as a result of the USD 3.4 billion of fresh foreign currency deposits and then swapped them using the concessions offered by the RBI.
He said the bank will strive to protect margins in the 4.1-4.4 per cent range going forward.
The lender's share of the low-cost current and savings account (CASA) deposits came down to 41 per cent as a result of the overseas deposit raising.
HDFC Bank's total Q3 income moved up to Rs 12,739 crore, from Rs 10,818.13 crore in the year-ago period.
For the first three quarters of 2013-14, the bank clocked nearly 27 per cent rise in net profit to Rs 6,151.9 crore, compared to Rs 4,836.44 crore in the 9-months of 2012-13.
It reported total income of Rs 36,265.2 crore for the first nine months of the current fiscal, compared to Rs 30,790.0 crore in the previous financial year.
Sukthankar defended going aggressively for deposits, saying they do not carry any SLR or CRR requirements and will also help the bank on priority sector lending.
HDFC Bank's total deposits grew 22.9 per cent in Q3, 2013-14. Advances also expanded by 22.9 per cent.
Within the advances, a conscious move to stay away from commercial vehicle loans, a slowdown in demand from other segments like car credits and a dip in the amount of housing loans bought from its parent HDFC Ltd resulted in the bank's wholesale advances growth out-pacing retail.
After two consecutive quarters of out-pacing wholesale advances growth, retail advances expanded 13.6 per cent.
The wholesale advances, consisting largely of working capital requirements of corporates, widened by 22.1 per cent.
The bank bought only Rs 500 crore of loans from parent HDFC as against the normal amount of Rs 1,200 crore-Rs 1,500 crore per quarter, Sukthankar said.
Its gold loans book dipped to Rs 4,111 crore in Q3, from Rs 4,703 crore in the year-ago period, but Sukthankar said the bank will grow in this segment and attributed the slowdown to drop in the yellow metal's prices.
HDFC Bank bank scrip fell by 0.84 per cent to Rs 668.30 on the BSE, where the 30-share benchmark index, Sensex, ended the session down 0.95 per cent.
