HDFC Bank Profit Rises 45% on Loan Growth, Bonds Gain (Update1)
By M.C. Govardhana Rangan
Jan. 14 (Bloomberg) -- HDFC Bank Ltd., India’s third- biggest lender by market value, reported third-quarter profit rose 45 percent as companies borrowed more and gains on investments in bonds boosted earnings. Net income rose to 6.22 billion rupees ($128 million) in the three months ended Dec. 31, from 4.29 billion rupees a year earlier, the bank said in a statement today. The profit beat the 5.9 billion rupees median estimate of five analysts surveyed by Bloomberg News.
Earnings for the most recent quarter included results from Centurion Bank of Punjab Ltd., which was acquired last year.
Loan growth for Indian banks averaged 27 percent in the quarter, compared with 23 percent a year earlier, according to central bank data, as companies such as Tata Motors Ltd., the nation’s biggest truck-maker, and aluminum producer Hindalco Industries Ltd. sought credit to fund their capital spending.
Government bonds posted their biggest quarterly gain as the central bank cut borrowing costs four times in less than three months to stimulate a slowing economy, boosting the value of investments.
HDFC bank advanced 1.1 percent to 999.9 rupees at 1:50 p.m. local time in Mumbai trading.
Pretax earnings from treasury operations jumped 16 percent to 1.84 billion rupees from a year earlier. Net interest income, or revenue from lending minus interest paid for funds, rose 38 percent to 19.8 billion rupees. Fee income jumped 40 percent to 6.44 billion rupees.
Provisions for bad debt jumped 33 percent at the bank to 4.65 billion rupees as customers fell behind on payments before the central bank started cutting borrowing costs. Net bad loans more than doubled to 6.14 billion rupees, the statement from the bank said.
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