The leading 3 private banks in India have again regained their glory after the sad performance earlier fiscal. ICICI Bank, HDFC Bank and Axis Bank have shown appreciable performances despite the rigid monetary control steps by RBI to regulate inflation.
The banks have posted growth in their loan books, enhancements in their asset qualities and preservation of their margins.
The loan book of banks which declined sharply to 10% in the 3rd quarter went up to 16% by the end of the 4th quarter. The private banks have shed their cautious method of safeguarding their asset quality and have increased lending. Lending to the retail arm is also increasing.
HDFC Bank posted a 25% increase in retail loan book for FY10. The corporate lending went up by 40% in the March quarter. The advances of the bank went up by 27%.
Chanda Kochhar, managing director and CEO, ICICI Bank, says, “For the current fiscal (2010-11), we intend to expand our loan book by 15-20 per cent and deposits by 20 per cent. We see demand coming from segments like home loans, car loans, CV (commercial vehicle) loans, project finance and trade finance.”
The bank has reported Rs. 1,81,206 crore increase in loan book for FY10.
Revaluing the high cost deposits has permitted banks to retain higher margins in the fianl quarters. The CASA deposits of HDFC Bank went up by 50% in the March quarter which is presently the highest in the industry.
Axis Bank has seen an increase in net interest margin (NIM) by 70 basis points on a y-o-y basis to 4.1%. HDFC’s margins have gone up by 20% to 4.4%.
The provisions of these banks have increased in this quarter due to a hike in their net profits. NPAs of HDFC Bank are mere 0.3%. But for ICICI Bank, it was 2.1%. Axis Bank’s net NPAs were 0.4%.
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