HDFC’sQ2ProfitUp15%on Af­ford­able Hous­ing De­mand

Rose by 18%, with high-mar­gin non-in­di­vid­ual loans up 24%; gross NPAs sta­ble at 1.14% of to­tal ad­vances

The Economic Times - - Smart -

Mum­bai: Hous­ing De­vel­op­ment Fi­nance Cor­po­ra­tion (HDFC), the coun­try’s largest mort­gage lender, said net profit rose 15% year-on-year in the quar­ter to Septem­ber on sta­ble spread and in­crease in de­mand for af­ford­able hous­ing fol­low­ing gov­ern­ment ini­tia­tives.

Net profit rose to ₹ 2,101.12 crore from ₹ 1,826.50 crore in year-ago quar­ter. Net in­ter­est mar­gin stood at 3.9%. “The growth has come from gov­ern­ment in­cen­tives for af­ford­able hous­ing and sta­ble prop­erty prices,” said Keki Mistry, vicechair­man at HDFC.

Net in­ter­est in­come, or the dif­fer­ence be­tween in­ter­est earned and paid out, climbed nearly 14% to ₹ 2,612 crore. HDFC shares gained 0.44% to close at ₹ 1,705.50 on the BSE on Mon­day, a day when the bench­mark in­dex, the Sen­sex, rose 0.33%.

LOAN GROWTH

The com­pany saw 18% growth in de­mand for loans at ₹ 3.68 lakh crore dur­ing the quar­ter. Its in­di­vid­ual loan book grew 16%. Growth in high mar­gin non-in­di­vid­ual loan book was 24% due to de­mand for af­ford­able hous­ing from the de­vel­oper seg­ment. Av­er­age loan size fell to ₹ 23.6 lakh from ₹ 26 lakh. The spread on loans over the cost of bor­row­ings stood at 2.29%. The spread on the in­di­vid­ual loan book was 1.92% and on the non-in­di­vid­ual book was 3.10%.

AS­SET QUAL­ITY STABILISES

As­set qual­ity sta­bilised with gross non-per­form­ing loans at 1.14% of the loan port­fo­lio as against 1.12% in the pre­vi­ous quar­ter. Gross NPA for non-in­di­vid­ual seg­ment, which in­cludes loans to de­vel­op­ers, cor­po­rates and lease rental dis­count­ing, was at 2.18%, up from 2.09% whereas in­di­vid­ual gross NPA re­mained sta­ble at 0.65%. The com­pany made pro­vi­sion of ₹ 3,235 crore against the reg­u­la­tory pro­vi­sion of ₹ 2,500 crore.

Mistry said HDFC has a prac­tice of set­ting aside 30% of wind­fall gains from stake sales but the board will de­cide how much it will set aside to cre­ate a buf­fer.

Con­sol­i­dated profit af­ter tax went up 17% to ₹ 2,869 crore as against to ₹ 2,446 crore in the year-ago quar­ter. Its as­set man­age­ment com­pany, which is likely to be listed by next year, saw profit rise to ₹ 254 crore from ₹ 197 crore. HDFC’s in­sur­ance busi­ness saw flat growth in profit with the gen­eral in­sur­ance busi­ness re­port­ing profit of ₹ 138 crore and life in­sur­ance ₹ 248 crore.

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