Friday Sep 20, 2024
Friday Sep 20, 2024
Friday, 23 May 2014 00:01 - - {{hitsCtrl.values.hits}}
The bank’s interest income has grown from Rs. 816.6 m to Rs. 1,029 m, an increase of 26%. Net interest income has grown up from Rs. 271.3 m to Rs. 367.7 m, an increase of 36%.
The bank’s fee based income has risen to Rs. 94.9 m during 1Q 2014 as against Rs. 21.1 m in 1Q 2013. Fee based income which represented 5% to the total interest income rose to 9% in 1Q 2014.
This was mainly due to introduction of a new fee based income structure and also on the collection of the utility bills.
The bank’s loan portfolio stood at Rs. 20.3 b as against Rs. 19.7 b in the 1Q previous year, an increase of 3%. The deposit portfolio in 1Q 2014 stood at 21.6 b as against 18.9 b, an increase of 14%.
Return on Assets (ROA) stood at 2.63% in the 1Q 2014 as against 1.28% in 2013. Return on Equity (ROE) as at 1Q 2014 stands at 15.31%.
HDFC Bank has met the Capital Adequacy requirement stipulated by the CBSL in the 1Q Tier 1 and Tier 2 capital as at 31 March 2014 stood at 16.60% and 17.2% respectively as against 5% and 10% regulatory requirement. The bank also maintains a healthy Statutory Liquid Asset Ratio of 30.96% as against the minimum of 20%.
Widened portfolio and new revenues streams
HDFC Bank was able to change its traditional business model and introduced a number of new short term lending products that has widened the scope of their portfolio and opened up new growing revenues streams for the bank.
These new product segments include micro finance, SME loans, education loans and leasing. This range of new products has placed HDFC Bank in a highly competitive footing with other banks with a more resilient portfolio and much wider field of operations.
The micro credit and SME credit lines have effectively leverage HDFC’s past experience in working with rural and urban populations.
The bank has made use of business development assistants across the country to expand micro finance activities.
As at end of 1Q the bank has granted advances among 2,100 borrowers to the value of Rs. 152 m to various sectors in micro category.
Unique mobile
banking concept
The bank introduced a unique mobile banking concept to the country in 2008. The mobile points have widened the operational scope far beyond the physical limits of the branch network and enabled the bank to directly access thousands of customers located in the rural interior. The mobile units that are managed by business development assistants target the SME and micro business sectors to deliver highly personalised value added services directly to their doorstep, gaining HDFC a competitive advantage.
This model of service delivery has also contributed towards significantly reducing risk factors associated with vulnerable groups due to direct contact and knowledge about customers. At the end of the last financial year we had 130 business development assistants who travel to customers doorsteps daily.
With the expansion of the bank’s product portfolio the bank recruited a new senior manager to head the leasing division with the required expertise and has commenced disbursements of leasing/hire purchase during the 1Q. The bank has also invested in vigorous training programs to staff in order to train them on newly-introduced products such as leasing and micro finance.
Supporting development initiatives
HDFC Bank continued to support Government development initiatives and collaborated closely with the Ministry of Construction, Engineering Services, Housing and Common Amenities to implement the Janasevena Program aimed at providing housing for low and middle income populations and Government servants. The loans are provided at a concessionary rate and have a ceiling of Rs. 500,000 per customer.
Another such program is the Central Bank’s re-finance scheme to re-build war damaged houses in the north and east. This credit line was implemented successfully through HDFC branches in Jaffna, Vavuniya, Trincomalee and Batticaloa.
