Riding on healthy loan disbursals, Housing Development Finance Corporation (HDFC) on Wednesday reported an 18.6 per cent rise in net profit during the June quarter to Rs 1,002 crore, as compared with Rs 844 crore in the corresponding quarter last year.
The home financier’s loan book grew 19.3 per cent to Rs 1.48 lakh crore from Rs 1.24 lakh crore in the year-ago period. The mortgage finance company sold loans worth Rs 4,978 crore to HDFC Bank; taking this into account, its loan book grew 23 per cent. The individual loan book, or retail loans, grew 29 per cent in the same period, HDFC said.
“We haven't seen any slowdown at all. Taking into account the loans sold to HDFC Bank, our loan book grew 29 per cent. So, there is no slowdown. Going forward, there is no reason why we would not be able to grow the loan book by 18-20 per cent, excluding loans sold,” said Keki Mistry, vice-chairman and chief executive officer. The average loan size was Rs 19.5 lakh.
The total income of the country’s largest mortgage financier increased 29.3 per cent during the quarter to Rs 4,935 crore, from Rs 3,817 crore a year before. Spreads were steady at 2.27 per cent.
Provisioning during the quarter was Rs 1,171 crore, of which Rs 1,367 crore was towards standard provisioning, including dual rate loans, and Rs 344 crore was for non-performing assets (NPAs). National Housing Bank, the regulator for home loan companies, has raised the standard provisioning for dual rate loans five times, to two per cent.
“Provisioning has gone up due to the provisions made on standard assets. This is a onetime provision as we had to provide for the entire book,” Mistry said.
Gross NPAs to total loans were 0.79 per cent, as against 0.84 per cent in the same period a year earlier. In a line, this is the 30th quarter-end at which the percentage of NPAs has been lower than the corresponding quarter in the previous year, HDFC said.
Regarding interest rates, Mistry said there is a lesser chance that the central bank would cut rates during the next policy meeting, scheduled on July 30.
Saying a revision in the lending rate would depend on cost of funds, Mistry said, “If RBI cuts rates and the cost of funds come down, then we might look at it, but as the situation stands now, there is relatively a lesser chance for that to happen (RBI to cut rates). However, if the IIP (Index of Industrial Production) numbers and inflation numbers improve, we might see some action from RBI in the next review.”