HDFC Bank maintains growth momentum

Thursday, 20 November 2014 00:00 - - {{hitsCtrl.values.hits}}

Housing Development Finance Corporation of Sri Lanka (HDFC Bank) has recorded Rs. 586.2 million profit before tax for nine months period ending 30 September 2014 as against Rs. 307.4 million in the corresponding period of 2013 an increase 91%. The profit after tax had been Rs. 295.4 million as against Rs. 158.9 million in the previous year an increase of 86%. The bank’s interest income has grown from Rs. 2576.6 million to 3,232.3 million an increase of 25%. The interest expense stood at Rs. 1902.7 million as against Rs. 1,778 million in the corresponding period during 2013 an increase of 7%. The net interest income has grown from Rs. 796.7 million to 1,329.6 million an increase of 67%. The fee based income has shown a decline from Rs. 208.8 million to 170.6 million. This was revealed by the Chief Executive Officer/GM Nimal Mamaduwa in a press release announcing the bank’s 3Q 2014 performance.

The bank’s loan portfolio stood at Rs. 22.3 billion as against Rs. 19.7 billion as at 31 December 2013 an increase of 14%. The deposit portfolio has increased to Rs. 23.4 billion from Rs. 18.9 billion an increase of 24% during the first nine month of the year 2014. The Return of Assets (ROA) stood at 2.64% as against 1.82% in the corresponding period 2013 an increase of 45% and the Return on Equity has risen from 8.13% to 13.8% an increase of 66%. HDFC Bank met the capital adequacy requirement stipulated by the CBSL as at 30 September 2014. T1 and T2 capital adequacy ratio stands at 14.5% and 14.9% respectively as against 5% and 10% regulatory requirement. The bank also maintains statutory liquid asset ratio of 30.2% as against 20% regulatory requirement as at the end of the 3Q 2014. The abovementioned satisfactory financial indicators have become possible mainly due to the banks product diversification plans implemented in the year 2013 and 2014. Under ‘Dirimaga’ Micro Finance Loan Scheme the Bank had been able to successfully identify micro entrepreneurs to commence self-employment schemes or to improve existing small businesses. The bank is also engaged in commercial scale dairy development loan scheme (CSDDLS) throughout its 33 branches island wide with the participation of CBSL on several training programs for entrepreneurs and financial literacy programmes on regional basis. During the 1Q 2014 the bank commenced implementation of ‘HDFC Leasing’ which has been particularly focused for small and medium entrepreneurs who require commercial vehicles, three wheelers, motor cycles and vehicles for professionals and others. HDFC Bank housing finance facilities are available to all socio-economic groups in the country. Over the year HDFC has strategically distributed its loan portfolio proportionately among all income segments of the population. Over 70% of the loan portfolio has been distributed to the low and middle income populations that represent 60% to 70% of the population. As a result, HDFC’s main market is the low and mid-income sectors which include rural and urban populations. Going forward, the bank has taken steps to expand the branch network with particular focus to regional development. Accordingly the bank expects to open branches in Nittambuwa, Nikawaratiya, Ambalangoda, Polonnaruwa, Kiribathgoda and Deniyaya in the near future for which regulatory approval has already been obtained. Housing Finance is traditionally a long term product at affordable interest rates. In keeping with the recent policy rates reduction in interest HDFC Bank has also taken steps to reduce the lending rates sustainably. In the area of technology, bank is currently in the process of migrating into a new core banking solution to meet new market realities.