HDFC Bank’s Q4 net grows 20% to Rs 3,374 cr on NII growth

Country's second largest private lender HDFC Bank on Friday reported a 20.2 per cent jump in its March quarter net at Rs 3,374.2 crore, helped by a healthy rise in core net interest income (NII).

The city-headquartered bank, which registered around 30 per cent profit growth for over a decade till 2013-14, posted a 20.4 per cent growth in post-tax profit at Rs 12,296.2 crore for fiscal 2015-16.

For the January-March period, NII rose 24 per cent to Rs 7,453.3 crore, while the non-interest income was up 11.8 per cent to Rs 2,865.9 crore.

Deputy Managing Director Paresh Sukthankar said NII was up on advances growth, which came in at 27 per cent for the fiscal, along with an expansion in the net interest margin (NIM) at 4.3 per cent. He said the bank will maintain its NIMs at 4 to 4.4 per cent and it does not see any impact of the marginal cost of funds-based lending rate on its spreads.

Fees and commissions grew to Rs 2,172.4 crore from Rs 1,834.8 crore, but it was a dip in the forex and derivates revenue and gains on revaluation or sales of investments which limited other income growth to 11.8 per cent in the fourth quarter of 2015-16.

Sukthankar said the bank is seeing some demand for long-term loans from corporates, but working capital and medium-term loans continue to be the mainstay of corporate demand.

On the retail front, he said the lender will continue to focus on the consumption demand-led credit needs, adding that the commercial vehicle book is performing well for over two quarters now. The lender has grown both its credit cards and personal loan books over the past fiscal by 27 per cent and 44 per cent, respectively, and continues to see opportunity in the unsecured book due to the under-penetration in the market.

He said the introduction of digital banking, like the '10-second personal loans', helped grow the unsecured book. The retail and corporate lines grew at an equal pace in 2015-16 and from a book composition, both stand at an almost equal footing.

On the asset quality front, Sukthankar said the bank was able to maintain the gross non-performing assets ratio at 0.94 per cent and the restructured book at 0.1 per cent, but conceded that the environment is challenging.