* Net profit 39.9 bln rupees vs 39.56 bln rupees estimate
* Bad loan ratio sequentially stable at 1.05 pct, provisions
* Says to chase retail as well as wholesale growth
* Shares close 2.4 pct higher
(Updates with management comment, shares hitting record high)
By Devidutta Tripathy
MUMBAI, April 21 (Reuters) - Shares in HDFC Bank,
India's second-biggest lender by assets, hit a record high on
Friday thanks to higher than expected quarterly profit and a
stable bad loans portfolio.
Net profit rose 18.3 percent from a year earlier to 39.9
billion rupees ($617.60 million) for its fiscal fourth-quarter
to March 31, HDFC Bank said, slightly ahead of analysts'
estimate of 39.56 billion rupees.
The Mumbai-based lender stands out in a sector that has been
marked by a surge in soured assets and slower loan growth. A
shock government ban on high-value banknotes in November also
hit their usual business as they scrambled to exchange scrapped
notes, and further weakened credit demand.
The sector also faces higher regulatory scrutiny with total
stressed loans in the sector hitting almost $150 billion.
HDFC Bank, with its stronger retail business and relatively
smaller exposure to project finance, has far lower bad loans
among India's leading banks, and has been an investor favourite.
"Our focus will remain on growing both our wholesale and
retail businesses, and that's something we remain committed to,"
Deputy Managing Director Paresh Sukthankar told a news
conference after the results.
Shares in HDFC Bank, which is the most valuable in the
sector and overall has India's third-highest market
capitalisation of about $58 billion, closed 2.4 percent higher
at 1496.60 rupees, having hit a lifetime high of 1499 rupees
earlier in the session.
BAD LOANS STABLE
The bank's gross bad loans as a percentage of total loans,
at 1.05 percent, were little changed from end-December, although
higher than 0.94 percent a year earlier.
Provisions, including for loan losses, jumped, however.
While faster loan growth led to an increase in standard
asset provisioning, loan-loss provisions also nearly doubled
from a year earlier to 9.78 billion rupees in the March quarter.
The bank said it accounted for loan defaults that were not
recognised as such in the December quarter after the central
bank temporarily relaxed rules to help businesses weather the
shock banknote ban.
HDFC Bank's "asset quality remains one of the best in the
system", said Alpesh Mehta, a sector analyst at Mumbai brokerage
Motilal Oswal Securities, adding the results "positively
HDFC Bank's loans grew 19.4 percent in the year to
end-March, far outpacing the sector's loan growth of about 5
That helped a 21.5 percent rise in fourth-quarter net
interest income from a year ago, while net interest margin for
the quarter was 4.3 percent. Non-interest income including fees
and commissions grew 20.3 percent in the March quarter.
($1 = 64.6050 Indian rupees)
(Reporting by Devidutta Tripathy; Editing by Muralikumar
First Published: 2017-04-21 09:58:44
Updated 2017-04-21 13:40:35
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