HDFC net up 33%, NPA ratio decline continues

Mortgage lender Housing Development Finance Corporation (HDFC) has posted a 32.8 per cent rise in net profit to Rs 891 crore for the quarter ended December 2010. Its net profit was Rs 671.3 crore in the corresponding quarter last year.

The profit from sale of investments was Rs 167 crore as compared to Rs 51 crore in the same period of the previous year. Analysts said this was mainly due to sale of stake in IF&FS. A research report by Bank of America Merrill Lynch has estimated the gain from the sale at Rs 160 crore. The loan book grew 27 per cent. Retail loan approvals rose 39 per cent and disbursements 38 per cent.

For the nine months ended December 31, loan approvals grew 29 per cent and disbursements 25 per cent as compared to the corresponding period of the previous year. “Individual business was robust, with individual approvals growing 39 per cent and disbursements 38 per cent as compared to the corresponding period of the previous year,” HDFC said.

The net interest income rose 25.6 per cent to Rs 1,328 crore from Rs 1,058 crore in the corresponding quarter of the previous year. Total expenditure rose 16.8 per cent compared to the quarter ended September.

As in the previous two quarters, HDFC maintained its spread at 2.33 per cent. Keki Mistry, vice-chairman and chief executive officer, said the company was looking to maintain this between 2.15 per cent and 2.35 per cent in the current financial year.

Due to the five-fold increase in provisioning for teaser schemes to two per cent, mandated by the National Housing Bank, it made a provision of Rs 272 crore towards these loans. HDFC discontinued the scheme on November 30.

Non-performing assets were down to 0.85 per cent from 0.94 per cent. “This is the 24th consecutive quarter-end when the percentage of non-performing loans has been lower than the corresponding quarter of the previous year,” HDFC said.