HDFC BANK Q3 Results Up by 58.78%

The market was expecting probably a lot more from HDFC Bank which is the only explanation why the share price came down after the results for the third quarter were declared. It was at an intra day high at Rs.1023.80 but after the results, it went on to touch an intra day at Rs.965.25 and then it recouped and ended the day at Rs.973, down 1.61% over previous day’s close.

The results for the quarter ended Dec 31, 2008 include operations of erstwhile Centurion Bank of Punjab Ltd, following its amalgamation with HDFC Bank with effect from April 1, 2008. Its total income went up 58.78% YoY to Rs 5407.89 crore. Its Net Interest Income (NII) was up 37.66% at Rs 1979 crore. NIMs for current fiscal is expected to remain around 4.2% to 4.4%.

Its other income was up 38% at Rs 939 crore. Other income relates to Income from non-fund based banking activities including commission, fees, foreign exchange earnings, earnings from derivative transactions and profit and loss (including revaluation) from investments. The Bank’s Q3 net profit was up 44.8% at Rs 621 crore.

On a QoQ basis, a further scrutiny in the results shows that its main revenue earner has been treasury operations, which rose 37% while wholesale/corporate banking was up 18%. Retail banking took a hit and was down 3.7%. But with interest rates coming down, the retail segment is expected to pick up in the coming months.


During the quarter, advances grew at 34.28% while deposits grew by 45.8% on a QoQ. Capital Adequacy Ratio (CAR) for Q3FY09 was at 13.7%, which in Q2FY09 was at 11.4%. CAR is a ratio of the Bank’s capital to its risk. So higher the percentage of CAR, it is considered less risky and it indicates the soundness and stability of the banking system.

Its NPA for Q3FY09 was same as what it was in Q2FY09, at 0.6%. As on December 31, 2008, the total number of branches (including extension counters) and the ATM network stood at 1,412 branches and 3,177 ATMs respectively.

Outlook for the future? It looks stable and with the interest rates coming down, the Bank would probably see some better tidings. With the Bank also clarifying that it does not have any material exposure to Satyam, it remains a safe bet. thanks