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
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%.
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.