HDFC bank grew its loan book 29%
The country’s most premium bank in terms of market valuation in India HDFC bank does not appear to be reflected in any way. In its profit in the quarter to June ’11, HDFC Bank clocked a year-on-year growth of 33.7%. Low provision coverage and strong loan growth become mainly driven of the profit growth. The bank grew its loan book up to 29%. It is way ahead of the industry average of 21%. HDFC Bank’s loan book has undergone a clear shift to a balanced portfolio between retail and corporate loans from being corporate-dominated.
Auto loans is primarily driven the retail book, while home loans have been stagnant this quarter. Home loans were once a major component of HDFC’s loan book portfolio. HDFC Bank’s net non-performing assets (NPAs) or bad loans are the lowest in the industry at 0.2% of its advances. The Reserve Bank mandated its provision coverage at 83% is in excess of the minimum 70%.
Although deposit growth of 13.3% was lower than the industry average, it does not detrimental to its cost of funds,. Account deposits fell 16.5% sequentially, currently. To substitute its low-deposit growth, the bank raised Rs 3,600 crore of Tier-II capital at almost the same interest rate.