HDFC profit up 11%, asset quality declines
MUMBAI: Mortgage lender Housing Development Finance Corp. Ltd (HDFC) on Wednesday said net profit in the third quarter rose 11% from a year earlier as higher core income rose.
Net profit stood at ₹3,261 crore in the quarter ended December 2021 compared to ₹2,926 crore during the same period last year. Net interest income or core income rose 7% to ₹4,284 crore from ₹4,004 crore in the same period last year.
Loan book grew 17% during the period to ₹5.38 lakh crore, driven by lending to affordable housing and high-end properties. The housing financier sold loans worth ₹7,468 crore to HDFC Bank during the quarter.
Growth in non-individual loan book this quarter was driven by the pick-up in lease rental discounting (LRD).
The company said that it is seeing a strong pipeline for both retail and construction finance loans in the current year.
“Demand for home loans and the pipeline of loan applications continue to remain strong. Growth in home loans was seen in both the affordable housing segment as well as in high-end properties. Increasing sales momentum and new project launches augur well for the housing sector,” HDFC said.
The company’s net interest margins remained stable at 3.6% at the end of December quarter.
Asset quality deteriorated as gross non-performing loans (GNPLs) rose 32 basis points sequentially to 2.32% at the end of December quarter. The increase in bad loans was on account of the Reserve Bank of India’s new rules mandating daily stamping of accounts to count the number of days they are overdue instead of a monthly or quarterly stamping.
Individual loan NPAs stood at 1.44% as on December 31 compared to 1.31% in the previous quarter. Non-individual loan NPA stood at 5.04% at the end of December quarter compared to 4.69% in the previous quarter.
“While there has been an increase in reported NPLs, there has been no financial impact and credit costs have reduced,” the company said.
Total provisions as on December 31 stood at ₹13,195 crore, it said.
Speaking at a post-earning call, Keki Mistry, vice-chairman and chief executive officer, HDFC, said the company has no plans to raise capital for a long period of time. It would instead focus on increasing leverage and return on equity in the coming years.