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Wednesday, 12 March 2014 01:02 - - {{hitsCtrl.values.hits}}
Housing Development Finance Corporation Bank (HDFC Bank) has recorded an impressive performance during 2013.
The bank’s CEO/GM Nimal J.B. Mamaduwa stated that the bank recorded a profit before tax of Rs. 306.9 m in 2013 as against Rs. 125.8 m in 2012 (subject to finalising of audit). The profit after tax had been Rs. 233.5 m as against Rs. 55.5 m in the previous year, which is an increase of almost 320%.
During the year 2013 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’s interest income has grown up from Rs. 3.528 b in 2013 from 2.634 b, which is an increase of Rs. 34%. The net interest income had gone up from Rs. 829.4 b to Rs. 1.058 b, an increase of 28%. The bank’s loan portfolio has risen from Rs. 15.9 b to Rs. 19.7 b, an increase of 23.7% as against the previous year. The deposit base in the year 2013 has grown up to 18.9 b as against Rs. 14.6 b, an increase of 28.7%.
The Return on Assets (ROA) stood at 1.62% during the period under review as against 0.86% in the previous year and Return on Equity (ROE) increased from 2.32%to 8.90%.
HDFC Bank continued to support Government development initiatives in 2013. The bank collaborated closely with the Ministry of Construction, Engineering Services, Housing and Common Amenities to implement the ‘Janasevena’ Scheme aimed at low and middle income sector and Government servants. Under this scheme the loans are provided at the concessionary rate of 13% per annum and have a ceiling of Rs. 500,000 per person. Another such programme is the Central Bank of Sri Lanka’s refinance scheme to rebuild damaged housing in north and east during war time.
HDFC Bank met the capital adequacy requirements stipulated by the Central Bank of Sri Lanka in 2013. As at 31 December 2013, Tier 1 and Tier 2 capital stood at 16.52% and 17.08% as against the 5% and 10% regulatory requirement. The bank also maintains a healthy statutory liquid assets ratio of 28.74% as against the regulatory requirement of 20%.
The noteworthy development in 2013 was the bank’s first highly successful listed debenture that raised Rs. 2 billion, which was oversubscribed to the value of Rs. 4 b on the opening day itself which is an affirmation of the HDFC Brand equity. The bank’s objective for the debenture was to raise long term funds and manage the assets and liability gap and utilise same for the lending.
The bank continued to maintain a healthy portfolio of advances supported by a high quality credit evaluation process. As a result, the bank’s NPL as at end of December 2013 was 7.26 as against 7.96 in 2012, excluding the EPF category of which the recovery is guaranteed by the Central Bank of Sri Lanka.
Over the years HDFC has been recognised for its services to the public by many different institutions. The bank continued to set industry benchmarks in 2013 with the Bronze Award for the Bank’s Annual Report from the Institute of Chartered Accountants of Sri Lanka.
The bank has been recognised at the ACCA Sustainability Award for the fourth consecutive year as the runner up for the banking, finance and insurance category. The bank has also been recognised by the Sting Corporate Accountability Index of LMD Magazine, which rated HDFC under the Silver category.
