HDFC Bank provides Rs 100 cr for its derivatives exposure

Private sector lender HDFC Bank, which has posted a 37.1 per cent rise in net profit at Rs 471.1 crore in Q4 2007-08.

Private sector lender HDFC Bank, which has posted a 37.1 per cent rise in net profit at Rs 471.1 crore in Q4 2007-08, has made a provision of around Rs 100 crore on account of currency derivative trades. According to a bank official, HDFC Bank has made a provisioning of Rs 172.7 crore for multiple contingencies, including around Rs 100 crore for a possible hit on account of domestic derivatives exposure. The bank has no exposure in any instruments like collateralised debt obligations CDO and credit linked notes CLN.

The bank, which has been taken to court by some customers on account of derivatives, has also made a small provisioning on that count. 8220;The amount on account of litigation is very small,8221; said a bank official. However, unlike other banks like Axis Bank and State Bank of India, HDFC Bank has not revealed any mark to market losses MTM of its clients.

Provisions and contingencies for the quarter stood at Rs 465.1 crore against Rs 267.1 crore for the corresponding quarter ended March 31, 2007, principally comprising of specific provisions for non-performing assets and general provisions for standard assets of Rs 293.0 crore and provisions for tax, legal and other contingencies of Rs 172.7 crore, the bank said in a statement.

With almost a 50:50 break-up of its retail and corporate businesses, the net profit of the bank for the full year was Rs 1,590.2 crore, up 39.3 per cent over the corresponding year ended March 31, 2007.

Net revenues net interest income plus other income stood at Rs 2,191.4 crore for the reporting period, showing an increase of 51.2 per cent over Rs 1,448.9 crore for the corresponding quarter of the previous year.

The bank8217;s total balance sheet size increased by 46.0 per cent from Rs 91,236 crore as of March 31, 2007, to Rs 1,33,177 crore as of March 31, 2008.

This excludes the balance sheet size of Centurion Bank of Punjab, which recently merged with HDFC Bank. Total deposits were at Rs 1,00,769 crore, an increase of 47.5 per cent. It declared a dividend of 85 per cent, up from 70 per cent.

Story continues below this ad

HDFC Bank8217;s other income non-interest revenue registered a growth of 39.3 per cent from Rs 394.4 crore for the reporting period the previous fiscal, to Rs 549.3 crore for the quarter ended March 31, 2008.