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HDFC Bank Result Review

October 17, 2008

HDFC Bank has reported a profit after tax (PAT) of Rs528 crore for Q2FY2009, indicating a growth of 43.3% year on year (yoy). The Q2FY2009 financials include the effect of the merger of Centurion Bank of Punjab (CBoP) with HDFC Bank and hence are not strictly comparable with the performance in the year-ago period.

The net interest income (NII) for the quarter stood at Rs1,866.5 crore, up 60.5% yoy buoyed by the CBoP acquisition-led balance sheet expansion and healthy margins. The reported core net interest margin (NIM) stood at a healthy 4.2% compared with 4% a year ago. The capital raised by HDFC Bank and CBoP during FY2008 has contributed to the same.

The non-interest income growth was robust at 33.3% and stood at Rs643.1 crore. The growth in the non-interest income primarily stemmed from an impressive 49.9% year-on-year (y-o-y) growth in the fee income. Incidentally, the bank suffered a treasury loss of Rs15.6 crore during Q2FY2009 compared with a gain of Rs46.2 crore.

The asset quality of the merged entity indicated a marginal sequential
deterioration. In absolute terms, the gross non-performing assets grew by 11.5%

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