HDFC Bank records Rs. 182 m profit for 2004

HDFC Bank has recorded a pre-tax profit of Rs. 235 million during the financial year ended on December 31, 2004, the Chairman S.M.M Yaseen, said presenting the Bank's Annual Report covering its first complete annual performance since becoming a licensed specialised bank.

"We have posted a post-tax profit of Rs. 182.7 million for the year. This performance is an outcome of strict scrutiny on overhead expenses, and a focus on sound credit and recovery of overdue advances. The gross income increased by 14 percent over the previous year and stood at Rs. 947 million with the net profit contributing to an increase of shareholder funds to Rs. 1,013 million, which is a 14.5 percent increase on the previous year," Yaseen said.

However, the CEO and the General Manager of the Bank C.A. Sarathchandra said the post and pre-tax profits in 2004 represented reductions of 7.6 percent and 7.5 percent respectively.

"This decline however, has to be viewed in the context of enhanced prior year profits and particularly the increase in payment of Value Added Tax from Rs. 25 million in 2003 to Rs. 56 million in 2004. Additional contributory factors for the decrease in profitability were the reduction in lending rates which resulted the reduction in interest margin to 3.65 percent in 2004 from 4.95 percent in 2003," Sarathchandra said.

He said that during the year, a total of 9,882 housing loan applications were approved with a value of Rs. 2,100 million.

The total loan portfolio of the Bank by the end of the year stood at Rs. 7,048 million distributed among 54,199 borrowers. We have maintained throughout the high percentage of loans granted to low income groups. The purposewise analysis of the loan portfolio reflects the priority given for the construction of new houses ensuring contribution committed towards the increase in country's housing stock. HDFC Bank, has been successful in maintaining a proper balance between the social responsibility and profitability of the organisation," Sarathchandra said.

HDFC Bank became a licensed specialised bank by an Act of Parliament in 2003. It has shown consistent progress over the past few years overcoming many challenges in housing finance. Recognising its efficient and quality delivery system of housing loans it was awarded with the Business Excellence Award for the Financial Services Sector by the National Chamber of Commerce in 2004.

(CK)