The HDFC Bank of Sri Lanka has more than doubled profit after-tax in 2011 to Rs.310 million, up from Rs.135 million the previous year, on a 6% increase of income of Rs.2.74 billion the bank’s annual report reveals.
The year had seen HDFC granting 14,224 housing loans valued at Rs.4.76 billion compared to 10,739 facilities worth Rs.3.07 billion a year earlier.
The savings customer base had improved from 210,000 to 261,000 boosting deposits by 48% and the branch network had been enhanced to 31 from 28 branches the previous year. HDFC had 310 ATMs (225 the previous year) and 100 mobile banks islandwide, up from 81 a year earlier.
The bank said that it had created 80 new jobs increasing total staff to 505 and had achieved a 6% decline in cost per employee and reduced the staff turnover by 21%.
HDFC Chairperson, Mrs. Siromi Wickramasinghe, has said in the annual report that the bank’s strategic priority during the year under review was addressing the housing finance need of the rapidly urbanizing population and the growing income sector.
She said that the highest number of loans had been granted in Colombo, Gampaha, Kalutara and Kandy districts which recorded a high rate of population density and urbanization. The bank had financed construction of 12,142 new housing units with a total construction value of approximately Rs.12 billion in these districts.
"Majority of these customers are migrants from other areas of the country that are searching for affordable finance within their salaried income," she said.
Low and middle income groups with hardly any access to formal housing finance were granted 64% of the loan facilities disbursed with about 14% of these facilities were extended in the Nuwara Eliya, Matale and Badulla districts where the majority of customers are from estates.
Wickramasinghe attributed the remarkable 48% year-on-year growth of the Savings Fund which had reached the Rs.1.5 billion benchmark due to significant improvement in internal efficiencies, capacity building, stringent cost controls and efficient engagements with important stakeholders.
She said that the main focus for 2012 will be on sourcing low cost matching funds in terms of savings and investments and penetrating into wider rural bases to grow both savings and lending portfolios.
"Our future strategy therefore will be to strengthen long term funding through savings and investment which are mainly focused for housing finance and retirements of wider base of the population," she said.
"HDFC plans to widen the short term loan portfolio as a strategic approach of managing maturity risk. In this scenario we will be focusing more into lifestyle development loans and gold collateralized loans which have increasing potential among the growing middle income families."
HDFC has a stated capital of Rs.962.1 million and reserves of Rs.1.16 billion in its books with total assets running at Rs.19.7 billion and liabilities at Rs.17.57 billion.
The profit after-tax during the year under review was an all-time high for the bank.
The National Housing Development Authority with 49.73% of the bank is the biggest shareholder followed by LOLC (15%) and Perpetual Capital (Pvt) Limited with 14.03%.
The bank’s share traded at a high of Rs.1,900 and a low of Rs.546 closing the year at Rs.1,400.30. This compared with a trading range of Rs.135 to Rs.600 closing at Rs.550 the previous year.
The directors of the bank are: Mrs. S.N. Wickramasinghe (Chairperson), Mr. W.J.L.U. Wijayaweera, Mrs. K.W.P. Dayarathne, Mrs. C. Wijayawardhana, Mr. W.D.R.D. Goonaratne, Mr. S.A.J. Samaraweera, Mr. W.D.K. Jayawardena, Mr. A.J. Aloysius and Mrs. A. Chandrasagara.