(Adds detail throughout)
Oct 12 HDFC Bank, India's No.3 lender,
met forecasts with a 30 percent year-on-year rise in second
quarter profit, led by stronger loan growth, greater fee income
and stable net interest margins.
Its results underscore robust quarterly performances by
India's private sector banks in recent quarters compared with
struggling government-owned lenders, though worsening asset
quality and rising debt restructuring remain serious challenges
for the sector.
Mumbai-based HDFC Bank, among the first lenders to report
July-September results, said on Friday its net profit rose to
15.6 billion rupees ($296.18 million) in that quarter, from 12
billion rupees a year earlier.
According to Thomson Reuters I/B/E/S, analysts had expected
a net profit of 15.58 billion rupees for the bank, which is also
listed in New York and competes with bigger local rivals
State Bank of India and ICICI Bank.
Considered a safe investment for its robust quarterly
performances, the bank saw asset quality remaining steady, with
the ratio of net non-performing loans to net advances at 0.2
percent as of end-September. Total restructured loans stood at
0.3 percent of its loan book.
Net interest income grew 26.7 percent to 37.3 billion rupees
during the quarter, driven by 23 percent growth in its loan book
and stable net interest margin, a key gauge of profitability,
which stood at 4.2 percent, in line with the bank's estimate of
holding it at 3.9-4.2 percent in the near-term.
It has the highest price to book value for any large bank in
Asia at a multiple of 4.8, compared with 2 times for ICICI and
1.4 for SBI.
HDFC expects its loan book to grow at more than the 17
percent expected for the overall domestic banking sector in the
current financial year ending March 2013.
Lending rates in India are still high, ranging from around
10 percent for home loans to as high as 16 percent for risky
products, charges which have hurt loan demand in the country.
Shares in HDFC Bank, which the market values at $27.8
billion, were up 1 percent at 631.15 rupees b y 08.57 GMT w hile
the broader Mumbai market was down 0.53 percent and the
banking sector index was flat.
(Reporting by Swati Pandey in MUMBAI; Editing by Daniel