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Mumbai, Jul 19 (PTI) Leading private sector lender HDFC Bank today reported a robust 34 per cent increase in its June quarter profit at Rs 812 crore on the back of strong loan growth, and sounded bullish about the next quarter saying it will grow above the industry average. The second largest private sector lender expects a better-than-industry growth in its advances in the coming quarters and is optimistic to maintain its net interest margin to be "fairly stable" at 4.2-4.3 per cent, its executive director Paresh Sukthankar told newsmen here today after announcing the first quarter numbers that met market outlook. "The industry is expected to grow in the low 20s and we expect to grow above the industry," Sukthankar said. Despite a sharp fall in its treasury income, the bank''s net profit rose to Rs 811.71 crore or 33.8 per cent compared to Rs 606 crore in the year-ago quarter. Its gross advances expanded by a little over 40 per cent during the quarter. The bank''s retail book alone grew by 24.4 per cent to Rs 76,068 crore and currently constitutes 51.5 per cent of its advances. Nearly Rs 21,000 crore of retail loans is auto loans, Rs 9,500 crore housing loans and around Rs 9,000 crore personal advances, the bank said. Of the total loan growth, around 10 per cent increase in advances came from "short-term, one-off movements in wholesale loans," Sukthankar said, adding during the quarter, net interest margin rose marginally to 4.3 per cent from 4.2 per cent a year earlier. However, the treasury income fell sharply to Rs 49.17 crore from Rs 404.15 crore in the same period last year, primarily owing to depreciation of its bond portfolio. But total income rose by 4.3 per cent to Rs 5,360 crore in the April-June period up from Rs 5,136 crore in the same period last fiscal. Helping the rise in profit was lower provisions which stood at Rs 555 crore from over Rs 658 crore in the same quarter last fiscal. Another enabling factor has been a steady improvement in its asset quality and its ability to reduce the level of net non-performing assets by half-- to 0.3 per cent from 0.6 per cent in the June 2009 quarter, Sukhathankar said. Profit on investments for the quarter was significantly lower at Rs 21.5 crore as against Rs 256 crore in the year-ago period and a negative Rs 47.3 crore in the March quarter. Replying to a query on interest rates, Sukthankar said the rise in lending rates will depend on the policy cues from the Reserve Bank and the individual liquidity situation of banks.
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