Off Curve

May 20, 2010 (LBO) – Sri Lanka’s HDFC Bank’s profits for the March 2010 quarter soared to 224 million rupees turning around from a loss of 52 million a year earlier, as the firm recovered defaulted loans backed by pension fund balances. HDFC provided 40 million rupees for loan losses in the quarter up from 15.7 million rupees last year.

Group non-interest income rose 43 percent in the quarter to 143 million rupee with staff costs rising 37 percent to 72.6 million rupees.

The group had gross assets of 14.9 billion rupees, up from 14.1 billion in December. Net assets grew to 1.78 billion rupees from 1.56 billion in December.

HDFC reported basic earnings per share of 34.68 rupees for the quarter.

Interest income soared 77 percent to 781 million rupees in the March quarter, interest expenses fell 19 percent to 241 million rupees allowing net interest income to soar 934 percent to 491 million rupees.

Several Sri Lankan banks give housing loans to borrowers against the balances of their Employees Provident Fund (EPF), a state-managed compulsory saving scheme for private sector workers, which usually pay returns below inflation.

Some desperate private sector workers take housing loans and default on them as a ba