HDFC Bank reports 20.5 per cent rise in net profit to Rs 2,870 crore
Mumbai: Strong operating performance and healthy asset quality helped the country’s second largest private sector lender HDFC Bank to register 20.5 per cent rise in net profit to Rs 2870 crore for the second quarter ended September 30, 2015. During July-September quarter of 2014-15, the bank had earned Rs 2,381.5 crore profit.
Paresh Sukthankar, deputy managing director, HDFC Bank told reporter at bank's earnings call, “We have been maintaining NIM between 4.1-4.4 per cent. However this quarter the NIM has come off by 10 basis points because of the drop in base rate and a strong increase in fixed deposits. Therefore Casa growth has been lower than previous quarters. Deposits will continue to get repriced. Also many of our corporate customers are borrowing through the commercial paper route. All these have contributed to a 10 basis points reduction in NIM.”
“Between now and the end of this quarter we will recaliberate our base rate. This is inevitable. The deposit rates are on a downward trajectory and so it is reasonable to expect a downward revision in base rate,” added Sukthankar.
HDFC Bank had cut its base rate by 35 basis points to 9.35 per cent on September 1. With the cut, HDFC Bank has reduced its base rate by 65 basis points since April. It had cut this rate by 15 basis points twice, in April and June. Sukthankar said that he expects the retail advances growth to outpace corporate growth this year. “Retail demand is picking up and therefore better positioned. On wholesale side, we do more of working capital loans and are less dependant on capex loans. Retail loan growth many outpace corporate growth this year.”
Other income at Rs 2,551.8 crores was 27.6 per cent of the net revenues for the quarter ended September 30, 2015. The total income of the bank for the September quarter this financial year was Rs 17,324.3 crore. Vaibhav Agrawal vice-president research banking at Angel Broking said, “In light of current macro environment, the current earnings trajectory of 20 per cent plus year on year is strong which in our view, justifies a premium valuation multiple. Hence, we recommend buy rating on the stock.”
