HDFC Bank profits up 49% in 1H, 2015

Housing Development Finance Corporation Bank of Sri Lanka (HDFC Bank) has recorded Rs. 388.9 mn profit before tax (PBT) in 1H, 2015 as against Rs. 310.5 mn in the corresponding period of 2014, an increase of 25%.

The profit after tax (PAT) had been Rs. 276.2 mn as against Rs. 185.1 mn an increase of 49%. The interest income has increased from Rs. 2118 mn to Rs. 2260 mn, an increase of 6.7%. The net interest income of the Bank has increased from Rs. 856.3 mn to Rs. 1,050.6 mn, an increase of 22.7%. The interest expenses have been reduced to Rs. 1209.9 mn from Rs. 1262.2 mn due to re-pricing of deposits.

The operating expenses increased to Rs. 622.2 mn from Rs. 513.5 mn, an increase of 21% due to additional staff costs and expenditure incurred due to Branch expansion. This was revealed by Chief Executive Officer and GM of the Bank, Nimal Mamaduwa in a press release recording the Banks 1H,v2015 results.

The Bank's customer deposit base increased from Rs. 24.5 bn to Rs. 26.1 bn during the first six months, an increase of 6.8%. The loan book increased from Rs. 23.3 bn to Rs. 24.6 bn, an increase of 5.2%.

The Return on Assets (ROA) stood at 2.71% as against 2.51% as at December 31, 2014, while the Return on Equity (ROE) increased from 13.7% to 18.3%. The Bank's T1 capital and Total Capital Adequacy Ratio stood 13.08% and 12.29% which are well within the regulatory needs, although the ratios have been marginally reduced due to the credit growth shown in the first half of 2015.

The Bank also maintains a healthy statutory liquid asset ratio of 30.6% as against the regulatory 20%.

During the first half 2015 the Bank established two branches in Polonnaruwa and Kiribathgoda under the branch expansion program thereby taking the branch network to 38.

The Bank will continue to expand its branch network as we believe that there are still many unbanked people in rural areas. The Bank hopes to increase the branch network to cover the entire country and explore the potential to increase the volumes of unbanked being ushered into the formal sector.

The Bank is working closely with Divisional Secretariats and other government agencies through the branches to identify new growth areas and reach communities which are underserved in terms of formal financial solutions.

The Banks strategy of diversifying product portfolio, launched in 2013 delivered significant gain for the Bank in terms growth and profitability.

The product diversification was focused on the launch of several micro finance solutions to extend micro housing loans which has helped the beneficiaries to improve and upgrade their shelter into a liveable home and improving their standard of living.