EX-1 2 h00949exv1.htm EX-1 LETTER DATED 11TH JANUARY, 2007 EX-1 LETTER DATED 11TH JANUARY, 2007
 

Exhibit 1
11th January, 2007
To
The New York Stock Exchange,
New York,
USA
Dear Sir / Madam,
Subject: Unaudited Financial Results for the quarter ended 31st December, 2006
We attach herewith two files containing the unaudited financial results of the Bank for the third quarter ended 31st December, 2006 and the press release in respect thereof as approved at the Board Meeting today.
The unaudited financial results have been submitted to the Stock Exchanges in India as per the listing requirements of those stock exchanges.
This is for your information and record.
Thanking you,
Yours faithfully,
For HDFC Bank Limited
Sanjay Dongre
Vice - President (Legal) &
Company Secretary

 

 

UNAUDITED FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED DECEMBER 31, 2006
(Rs. in lacs)
                                             
    Particulars   Unaudited   Unaudited   Unaudited   Unaudited   Audited
        results for the   results for the   results for the   results for the   results for the
        quarter ended   quarter ended   nine months   nine months   year ended
        31-12-2006   31-12-2005   ended 31-12-   ended 31-12-   31-03-2006
                2006   2005    
1
   Interest Earned (a) + (b) + (c) + (d)     175931       117981       489926       309684       447534  
A
   Interest / discount on advances / bills     113729       73105       303890       187754       270020  
B
   Income on investments     58483       41824       169766       111906       163166  
C
   Interest on balances with Reserve Bank of India and other inter bank funds     3588       3013       15979       9961       14255  
D
   Others     131       39       291       63       93  
2
   Other Income     37330       29613       112180       81983       112398  
A
   Total Income (1+2)     213261       147594       602106       391667       559932  
3
   Interest Expended     83068       50920       230740       129041       192950  
4
   Operating Expenses (e) + (f)     60502       44912       173687       120877       169109  
E
   Payment to and provision for employees     21384       12500       56153       34926       48682  
F
   Other operating expenses     39118       32412       117534       85951       120427  
B
   Total Expenditure (3) + (4) (excluding provisions & contingencies )     143570       95832       404427       249918       362059  
C
   Operating Profit (A - B) (Profit before provisions and contingencies)     69691       51762       197679       141749       197873  
D
   Other Provisions and Contingencies     26639       19715       83597       54362       72522  
E
   Provision for Taxes     13488       9607       34294       26630       38273  
F
   Net Profit (C-D-E)     29564       22440       79788       60757       87078  
5
   Paid up equity share capital (face value Rs. 10)     31515       31218       31515       31218       31314  
6
   Reserves excluding revaluation reserve                                     498639  
7
   Analytical Ratios:                                        
A
   Percentage of shares held by Government of India     Nil       Nil       Nil       Nil       Nil  
B
   Capital adequacy ratio     12.8 %     10.3 %     12.8 %     10.3 %     11.4 %
C
   Earnings per share (par value Rs. 10/- each)                                        
 
   Basic     9.4       7.2       25.4       19.5       27.9  
 
   Diluted     9.2       6.8       25.0       18.4       26.3  
8
   Aggregate of Non-promoter shareholding                                        
 
   — No. of shares     246288408       243320308       246288408       243320308       244281408  
 
   — Percentage of shareholding     78.1 %     77.9 %     78.1 %     77.9 %     78.0 %

 

 

Segment information in accordance with the Accounting Standard on Segment Reporting (AS17) of the three operating segments of the Bank is as under:
(Rs. in lacs)
                                         
                                     
Particulars   Unaudited   Unaudited   Unaudited   Unaudited   Audited
    results for the   results for the   results for the   results for the   results for the
    quarter ended   quarter ended   nine months   nine months   year ended 31-
    31-12-2006   31-12-2005   ended 31-12-   ended 31-12-   03-2006
            2006   2005    
1.Segment Revenue
                                        
a) Retail Banking
     199993       135641       559127       358105       517384  
b) Wholesale Banking
     132402       74527       360004       199198       285338  
c) Treasury
     13109       18082       46878       52544       77389  
 
                                        
Total
     345504       228250       966009       609847       880111  
 
                                        
Less: Inter Segment Revenue
     132243       80656       363903       218180       320179  
 
                                        
Income from Operations
     213261       147594       602106       391667       559932  
 
                                        
2. Segment Results
                                        
a) Retail Banking
     18598       12912       66245       38246       70167  
b) Wholesale Banking
     24400       18654       48954       48640       53787  
c) Treasury
     54       481       (1117 )     501       1397  
 
                                        
Total Profit Before Tax
     43052       32047       114082       87387       125351  
 
                                        
3.Capital Employed
                                        
(Segment Assets-Segment Liabilities)
                                        
a) Retail Banking
     (59661 )     87546       (59661 )     87546       (1316 )
b) Wholesale Banking
     568758       472900       568758       472900       207260  
c) Treasury
     68117       (70961 )     68117       (70961 )     302572  
d) Unallocated
     41132       30441       41132       30441       21437  
 
                                        
Total
     618346       519926       618346       519926       529953  
 
                                        
Note on segment information
The reportable primary segments have been identified in accordance with the Accounting Standard on Segment Reporting (AS-17) issued by the Institute of Chartered Accountants of India (ICAI).
The Bank operates in three segments: retail banking, wholesale banking and treasury services. Segments have been identified and reported taking into account, the target customer profile, the nature of products and services, the differing risks and returns, the organisation structure and the internal business reporting systems.

 

NOTES:
1.   The above results have been approved by the Board at its meeting held on January 11, 2007.
 
2.   During the quarter and the nine months ended December 31, 2006, the Bank allotted 774,600 shares and 2,007,000 shares respectively pursuant to the exercise of stock options by certain employees.
 
3.   During the quarter ended December 31, 2006, the bank granted 3586500 stock options under its scheme titled “ESOS VIII” and 3046800 stock options under its scheme titled “ESOS IX” to its employees. The grant price of these options is Rs. 994.85, being the closing market price as on the working day immediately preceding the date of grant of options.
 
4.   Other income relates to income from non-fund based banking activities including commission, fees, foreign exchange earnings, earnings from derivative transactions and profit and loss (including revaluation) from investments.
 
5.   Provision for Taxes includes Rs. 375 lacs and Rs. 1200 lacs towards provision for fringe benefit tax (FBT) for the quarter and the nine months ended December 31, 2006, respectively.
 
6.   During the quarter ended December 31, 2006, the Bank raised Rs. 47850 lacs as Upper Tier II capital in the form of subordinated bonds.
 
7.   As on December 31, 2006, the total number of branches (including extension counters) and the ATM network stood at 583 branches and 1471 ATMs respectively.
 
8.   Information on investor complaints pursuant to Clause 41 of the listing agreement for the quarter ended December 31, 2006:
 
    Opening: Nil; Additions: 55; Disposals: 55; Closing: Nil.
 
9.   Previous period figures have been regrouped/reclassified wherever necessary to conform to current period’s classification.
 
10.   The above results for the quarter and the nine months ended December 31, 2006, have been subjected to a “Limited Review” by the auditors of the Bank, as per the listing agreements with Bombay Stock Exchange Limited and The National Stock Exchange of India Limited.
 
11.   Rs. 10 lacs = Rs. 1 million
Rs. 10 million = Rs. 1 crore
     
Place : Mumbai
   Aditya Puri
Date : January 11, 2007
   Managing Director

 

                 
            (Rs. in lacs)
Summarised Balance Sheet   As at 31-12-2006   As at 31-12-2005
CAPITAL AND LIABILITIES
                
Capital
     31515       31218  
Reserves and Surplus
     586831       488708  
Employees’ Stock Options (Grants) Outstanding
     1       8  
Deposits
     6674874       5119462  
Borrowings
     451205       375213  
 
                
Other Liabilities and Provisions*
     1216342       747688  
 
                
Total
     8960768       6762297  
 
                
ASSETS
                
Cash and balances with The Reserve Bank of India
     452178       361591  
Balances with Banks and Money at Call and Short notice
     353278       198328  
Investments
     2972242       2288126  
Advances
     4802135       3615621  
Fixed Assets
     95738       75811  
Other Assets
     285197       222820  
 
                
Total
     8960768       6762297  
 
                
 
*   Includes Subordinated Debt of Rs. 309050 lacs (previous year : Rs. 91400 lacs) and Rs. 20000 lacs (previous year : nil) of unsecured non-convertible subordinated perpetual bonds as on December 31 2006.

 

 

NEWS RELEASE
HDFC BANK LTD. — FINANCIAL RESULTS (INDIAN GAAP)
FOR THE QUARTER & NINE-MONTH ENDED DECEMBER 31, 2006
The Board of Directors of HDFC Bank Limited approved the Bank’s accounts for the quarter and nine months ended December 31, 2006 at its meeting held on Thursday, January 11, 2007. The accounts have been subjected to a limited review by the Bank’s statutory auditors.
FINANCIAL RESULTS
Quarter ended December 31, 2006
For the quarter ended December 31, 2006, the Bank earned total income of Rs.2,132.6 crores as against Rs.1,475.9 crores in the corresponding quarter ended December 31, 2005. Net revenues (net interest income plus other income) for the quarter ended December 31, 2006 were Rs.1,301.9 crores, an increase of 34.7% over Rs.966.7 crores for the corresponding quarter of the previous year. Interest earned (net of loan origination costs) increased by 49.1% from Rs.1,179.8 crores for the quarter ended December 31, 2005, to Rs.1,759.3 crores for the quarter ended December 31, 2006. Net interest income (interest earned less interest expended) for the quarter ended December 31, 2006 increased by 38.5% to Rs.928.6 crores driven by average asset growth of 31.6% and improvement in net interest margin to just over 4%.
Other income (non-interest revenue) for the quarter ended December 31, 2006 increased by 26.1% to Rs.373.3 crores, from Rs.296.1 crores for the corresponding quarter of the previous year. Its principal component was fees and commissions contributing Rs.331.4 crores for the quarter ended December 31, 2006, as against Rs.275.4 crores for the corresponding quarter ended December 31, 2005. The other two components of other income were foreign exchange/derivatives revenues of Rs.63.0 crores and profit/(loss) on revaluation/sale of investments of Rs.(21.1) crores as against Rs.20.1 crores and Rs.(0.6) crores respectively, for the quarter ended December 31, 2005. Operating (non-interest) expenses for the quarter increased by Rs.155.9 crores to Rs.605.0 crores and were 46.5% of net revenues. Provisions and contingencies for the quarter were Rs.401.3 crores (against Rs.293.2 crores for

 

 

the corresponding quarter ended December 31, 2005), principally comprising of specific provision for non performing assets and general provision for standard assets of Rs.192.9 crores and amortization of premia (for investments in the Held to Maturity category) of Rs.60.4 crores. After providing Rs.134.9 crores for taxation, the Bank earned a Net Profit of Rs.295.6 crores, an increase of 31.7% over the quarter ended December 31, 2005.
Total balance sheet size increased by 32.5% from Rs.67,623 crores as of December 31, 2005 to Rs.89,608 crores as of December 31, 2006. Total deposits were Rs.66,749 crores, an increase of 30.4% from December 31, 2005. With savings account deposits of Rs.19,238 crores and current account deposits at Rs.17,433 crores, the CASA mix was healthy at around 54.9% of total deposits as at December 31, 2006, as against 53.1% as at December 31, 2005. Net advances as at December 31, 2006 were Rs.48,201 crores, an increase of 32.8% over December 31, 2005, with gross retail loans now forming 52% of gross advances. The Bank’s customer assets (including advances, corporate debentures, investments in securitised paper, etc.) net of loans securitized and participated out increased to Rs.53,898 crores as of December 31, 2006, from Rs.42,538 crores as of December 31, 2005.
Nine months ended December 31, 2006:
For the nine months ended December 31, 2006, the Bank earned total income of Rs.6,021.1 crores as against Rs.3,916.7 crores in the corresponding period of the previous year. Net revenues (net interest income plus other income) for the nine months ended December 31, 2006 were Rs.3,713.7 crores, up by 41.4% over Rs.2,626.3 crores for the nine months ended December 31, 2005. Net Profit for the nine months ended December 31, 2006 was Rs.797.9 crores, up by 31.3%, over the corresponding nine months ended December 31, 2005.
BUSINESS UPDATE:
As of December 31, 2006, the Bank’s distribution network had expanded to 583 branches and 1,471 ATMs in 263 cities from 535 branches and 1,326 ATMs in 228 cities as of December 31, 2005. As of December, 2006 the number of debit cards issued by the bank touched 4 million while credit cards issued crossed the 2.75 million mark.
Portfolio quality as of December 31, 2006 remained healthy with net nonperforming assets at 0.4% of total customer assets. Capital Adequacy Ratio (CAR) was 12.8% against the regulatory minimum of 9%. Tier I CAR was at 8.4%. During the quarter ended December 31, 2006, the Bank has raised

 

 

Rs.479 crores of subordinated debt qualifying as Upper Tier II capital (including US$ 100 million in foreign currency).
Note:
(i) Rs. = Indian Rupees
(ii) 1 crore = 10 million
(iii) All figures and ratios are in accordance with Indian GAAP.
Certain statements are included in this release which contain words or phrases such as “will,” “aim,” “will likely result,” “believe,” “expect,” “will continue,” “anticipate,” “estimate,” “intend,” “plan,” “contemplate,” “seek to,” “future,” “objective,” “goal,” “project,” “should,” “will pursue” and similar expressions or variations of these expressions that are “forward-looking statements.” Actual results may differ materially from those suggested by the forward-looking statements due to certain risks or uncertainties associated with our expectations with respect to, but not limited to, our ability to implement our strategy successfully, the market acceptance of and demand for various banking services, future levels of our non-performing loans, our growth and expansion, the adequacy of our allowance for credit and investment losses, technological changes, volatility in investment income, cash flow projections and our exposure to market and operational risks. By their nature, certain of the market risk disclosures are only estimates and could be materially different from what may actually occur in the future. As a result, actual future gains, losses or impact on net income could materially differ from those that have been estimated.
In addition, other factors that could cause actual results to differ materially from those estimated by the forward-looking statements contained in this document include, but are not limited to: general economic and political conditions in India and the other countries which have an impact on our business activities or investments; the monetary and interest rate policies of the government of India; inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices; the performance of the financial markets in India and globally; changes in Indian and foreign laws and regulations, including tax, accounting and banking regulations; changes in competition and the pricing environment in India; and regional or general changes in asset valuations.