Mumbai: HDFC Bank, India’s No. 2 private sector lender, posted a 34% rise in quarterly profit, meeting street estimates, helped by strong corporate and retail loan demand in a fast-growing economy.
The bank, also listed in New York, said that gross advances grew by 40% in the April-June quarter from a year ago to Rs1.5 lakh crore ($31 billion).
HDFC Bank and its bigger rivals State Bank of India and ICICI Bank are seeing a pick-up in demand for loans on the back of improving business and consumer confidence in an economy forecast to grow about 8.5% in 2010-11.
Analysts said banks’ loan growth in April-June, the fiscal first quarter, was helped by mobile carriers’ scramble to secure funds to pay for 3G spectrum after winning an auction for high-speed radiowaves.
The government has raised $14.3 billion from the auction, nearly double the target.
The Reserve Bank of India (RBI) sees non-food credit growth of banks at 20% in 2010-11, still a far cry from growth rates of above 30% in the pre-crisis period.
ICICI Bank, India’s second-largest lender, expects its loans to expand by a fifth in the fiscal year ending March, its chief executive said on Monday, as corporate and retail borrowing rise in a growing economy.
HDFC Bank said its April-June net profit rose to Rs812 crore from Rs606 crore a year ago. A Reuters poll of brokerages had projected the quarterly net profit at Rs815 crore.
Shares in HDFC Bank, which the market values at $20 billion, ended 0.6% higher at Rs2,050.35 on the Bombay Stock Exchange (BSE).