Letter addressed to Mumbai Stock Exchange

Pursuant to amended clause 41 of the Listing Agreement, we fax herewith our Unaudited Financial Results for the third quarter ended 31^st December, 2003 and the segment wise reporting approved at the Board Meeting today.

UNAUDITED FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED
DECEMBER 31, 2003


		(Rs in lacs)

								Unaudited			Unaudited
		Unaudited			Unaudited			results for			results for			Audited
		results for			results for			the nine			the nine			results for
		the quarter			the quarter			months			months			the year
		ended			ended			ended			ended			ended
	Particulars	31/12/2003			31/12/2002			31/12/2003			31/12/2002			31/03/2003

1	Interest earned (a) + (b) + (c) + (d)		65830			50092			187306			145899			200999
a	Interest/discount on advances/bills		30071			19230			80831			55379			77370
b	Income on investments		33089			27936			99047			80629			111295
c	Interest on balances with Reserve Bank of India and
	other inter bank funds		2483			2838			6929			9681			12044
d	Others		187			88			499			210			290
2	Other income		12109			13988			33954			34353			46555
A	Total income (1+2)		77939			64080			221260			180252			247554
3	Interest expended		30398			30002			90580			88116			119196
4	Operating expenses (e) + (f)		20912			15265			58323			41087			57343
e	Payment to and provision for employees		5947			3872			15803			10372			15195
f	Other operating expenses		14965			11393			42520			30715			42148
B	Total expenditure (3) + (4) (excluding
	provisions & contingencies)		51310			45267			148903			129203			176539
C	Operating profit (A – B) (Profit before
	provisions and contingencies)		26629			18813			72357			51049			71015
D	Other provisions and contingencies		8311			3606			21703			10904			13930
E	Provision for taxes		5282			5319			15176			13047			18325
F	Net profit (C–D–E)		13036			9888			35478			27098			38760
5	Paid up equity share capital (face value Rs. 10)		28390			28201			28390			28201			28205
6	Reserves excluding revaluation reserve														196278
7	Analytical Ratios:
(i)	Percentage of shares held by Government of India	Nil			Nil			Nil			Nil			Nil
(ii)	Capital adequacy ratio		10.74	%		13.00	%		10.74	%		13.00	%		11.12	%
(iii)	Earnings per share (par value Rs. 10/-each)
	Basic		4.60			3.51			12.52			9.61			13.75
	Diluted		4.24			3.27			11.59			9.00			12.79
8	Aggregate of Non Promoter Shareholding
	–No. of shares		215036413			213149613			215036413			213149613			213185713
	–Percentage of shareholding		75.74	%		75.58	%		75.74	%		75.58	%		75.59	%

Segment information in accordance with the Accounting Standard on Segment Reporting (AS17) of the three operating segments of the Bank are:


		(Rs in lacs)

								Results for the			Results for the
		Results for the			Results for the			nine months			nine months			Results for the
		quarter ended			quarter ended			ended			ended			year ended
		31/12/2003			31/12/2002			31/12/2003			31/12/2002			31/03/2003

1.	Segment Revenue
a)	Wholesale Banking		49106			47438			144197			134593			179558
b)	Retail Banking		60202			49934			173343			139783			191304
c)	Treasury		11244			11215			30720			30673			42499

Total			120552			108587			348260			305049			413361

Less: Inter Segment Revenue			42613			44507			127000			124797			165807

Income from Operations			77939			64080			221260			180252			247554

2.	Segment Results
a)	Wholesale Banking		10365			7689			28037			20240			27222
b)	Retail Banking		4531			2583			12115			8741			14333
c)	Treasury		3422			4935			10502			11164			15530

Total Profit Before Tax			18318			15207			50654			40145			57085

3.	Capital Employed
(Segment assets — Segment liabilities)
a)	Wholesale Banking		687217			778911			687217			778911			715704
b)	Retail Banking		(696943	)		(689044	)		(696943	)		(689044	)		(587010	)
c)	Treasury		259527			127118			259527			127118			96202

Total			249801			216985			249801			216985			224896

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: wholesale banking, retail 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.

Segment revenue includes earnings from external customers plus earnings from funds transferred from one segment to the other based on an internal transfer price. Segment result includes revenue less interest expense (whether to customers or to the lending segment based on the internal transfer price) less operating expense and provisions, if any, for that segment.

Segment-wise income and expenses include certain allocations. Interest income is charged by a segment that provides funding to another segment, based on yields benchmarked to an internally developed composite yield curve which broadly tracks market discovered interest rates. Transaction charges are made by the retail banking segment to the wholesale banking segment for the use by its customers of the retail banking segment’s branch network or other delivery channels; such transaction costs are determined on a cost plus basis.

Segment capital employed represents the net assets in that segment. It excludes capital and tax related assets.

The above results have been taken on record by the Board at its meeting held on January 9, 2004.

During the quarter and nine months ended December 31, 2003, the bank allotted 4,16,400 shares and 18,51,700 shares respectively, pursuant to the exercise of stock options by certain employees. Subsequently, the bank allotted 8,94,300 shares on January 2, 2004.

On December 29, 2003, the Compensation Committee of the bank granted 68,23,400 stock options to employees at a price of Rs. 358.60 per option / equity share under the Employees Stock Option Scheme (ESOP IV) approved by the shareholders in June 2003.

Interest income is adjusted for retail loan acquisition costs (net of subventions) in line with international accounting practices.

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.

Previous period figures have been regrouped / reclassified wherever necessary to conform to current periods classification.

The above results for the quarter and nine months ended December 31, 2003, have been subjected to a “Limited Review” by the auditors of the bank, as per the listing agreements with The Stock Exchange, Mumbai, The National Stock Exchange and the The Stock Exchange, Ahmedabad.

Status of shareholder complaints received during the quarter ended December 31, 2003:

Total complaints pending for the quarter ended September 30, 2003:           Nil
Total complaints received during the quarter ended December 31, 2003:       31
Total complaints resolved during the quarter ended December 31, 2003:       31
Total complaints pending for the quarter ended December 31, 2003:            Nil


		(Rs in lacs)

		As at		As at
		31-12-2003		31-12-2002

CAPITAL AND LIABILITIES

Capital			28390		28201
Reserves and Surplus			234754		194144
Employees’ Stock Options (Grants) Outstanding			222		702
Deposits			2960614		2131677
Borrowings			158705		129352
Subordinated debt			20000		20000
Other Liabilities and Provisions			334466		220387

	Total		3737151		2724463

ASSETS

Cash and balances with Reserve Bank Of India			151522		111580
Balances with Banks and Money at Call and Short notice			57294		143622
Investments			1829301		1399524
Advances			1484202		889125
Fixed Assets			59942		50211
Other Assets			154890		130401

	Total		3737151		2724463

HDFC BANK LTD. — FINANCIAL RESULTS (INDIAN GAAP)
FOR THE PERIOD APRIL — DECEMBER 2003

The Board of Directors of HDFC Bank Limited approved the Bank’s accounts for the quarter and nine months ended December 31, 2003 at its meeting on Friday, January 9, 2004. The accounts have been subjected to a “Limited Review” by the Bank’s auditors.

For the quarter ended December 31, 2003, the Bank has posted a strong performance with total income of Rs.779.4 crores as against Rs.640.8 crores in the corresponding quarter ended December 31, 2002. Net revenues (net interest income plus other income) were Rs.475.4 crores for the quarter ended December 31, 2003, an increase of 39.5% over Rs.340.8 crores for the corresponding quarter of the previous year. Interest earned (net of loan origination costs) increased by 31.4% over the corresponding quarter ended December 31, 2002, to Rs.658.3 crores. Net interest income (interest earned less interest expended) for the quarter ended December 31, 2003 increased by Rs.153.4 crores to Rs.354.3 crores, driven by average asset growth of 36.2 % and an improvement in core net interest margin which crossed 3.7%.

Other income for the quarter ended December 31, 2003 was Rs.121.1 crores, consisting primarily of fees & commissions of Rs.81.3 crores, foreign exchange & derivatives revenues of Rs.28.2 crores, and profit on sale of investments of Rs.11.6 crores as against Rs.66.7 crores, Rs.25.1 crores and Rs.47.1 crores respectively for the quarter ended December 31, 2002. Operating expenses for the quarter increased by Rs.56.5 crores to Rs.209.12 crores and were 44.0% of net revenues and 26.8% of total income. Provisions and contingencies for the quarter were Rs.83.1 crores, principally comprising general & specific loan loss provisions of Rs.47.4 crores and amortization of premia (for investments in the Held to Maturity category) of Rs.26.5 crores. After providing Rs.52.8 crores for taxation, the Bank earned a Net Profit of Rs.130.4 crores, a 31.8% increase over the quarter ended December 31, 2002.

Balance sheet parameters also witnessed healthy growth across both the retail and corporate segments. As on December 31, 2003, total deposits were Rs.29,606 crores, an increase of 38.9% over Rs.21,317 crores as of December 31, 2002. The Bank continued to successfully leverage its expanded branch network and enhanced customer acquisition to build Savings Account deposits of Rs.6,968 crores, an increase of 67.4% over December 31, 2002. The Bank’s core customer assets (including advances, corporate debentures, CPs, etc) increased from Rs.11,308 crores as of December 31, 2002

to Rs.17,027 crores as of December 31, 2003, a growth 50.6 %. Gross retail loans grew 113% on a year-on-year basis to Rs.5,334 crores and now form 34.2 % of gross advances as against 27.1% of gross advances as at December 31, 2002.

For the nine months ended December 31, 2003, the Bank earned total income of Rs.2,212.6 crores as against Rs.1,802.5 crores in the corresponding period of the previous year. Net revenues (net interest income plus other income) for the nine months ended December 2003 were Rs.1,306.8 crores, up 41.8% over Rs.921.4 crores for the nine months ended December 31, 2002. Net Profit for nine months ended December 31, 2003 was Rs.354.8 crores, up 30.9%, over the corresponding nine months ended December 31, 2002.

During the current financial year so far, each of the bank’s major business franchises continued to perform well. The branch network was expanded to 275 outlets in 147 cities from 214 outlets in 111 cities in December 2002. As of December 2003; the number of debit cards issued by the bank touched 2 million while credit cards issued crossed 425,000. The bank consolidated its position as the leading bank depository participant (DP) with just over half a million investor depository accounts.

Portfolio quality as of December 31, 2003 remained healthy with net non-performing assets (on a “90 day overdue” basis) at 0.3% of customer assets and 0.4% of advances. General loan loss provisions were about 1% of standard advances as against the regulatory requirement of 0.25%. Capital Adequacy Ratio (CAR) was 10.7% against the regulatory minimum of 9%. Tier I CAR was at 9.0%.

Certain statements in this release which contain words or phrases such as “continue to”, “remains”, “should”, etc., and similar expressions or variation of these expressions or those concerning our future prospects are forward looking statements. Actual results may differ materially from those suggested by the forward looking statements due to a number of risks or uncertainties associated with the expectations. These risks and uncertainties include, but are not limited to, our ability to successfully implement our strategy, future levels of non-performing loans, our growth and expansion, the adequacy of our allowances for investment and credit losses, technological changes, volatility in investment income, our exposure to market risks as well as other risks detailed in the reports filed with the United State Securities and Exchange Commission. The bank may, from time to time make additional written and oral forward looking statements, including statements contained in the bank’s filings with the Securities and Exchange Commission and our reports to shareholders. The bank does not undertake to update any forward looking statements that may be made from time to time by or on behalf of the bank, to reflect events or circumstances after the date thereof.


Note:	(i)	Rs. = Indian Rupees
	(ii)	1 crore = 10 million
	(iii)	All figures and ratios are in accordance with Indian GAAP


Place: Mumbai Date: January 9, 2004		Aditya Puri Managing Director