HDFC Q1 net up 23% on higher disbursement

Housing Finance Development Corporation (HDFC), the country’s largest mortgage lender, has posted a 23 per cent increase in net profit at Rs 694.59 crore in the first quarter ended June 2010, as against Rs 564.92 crore in the corresponding quarter last year.

Its total income, however, declined to Rs 2,801.95 crore, from Rs 2,849.07 crore in April-June 2009.

During the quarter, profit from sale of investments was nil as compared to Rs 51.31 crore in the corresponding quarter last year. At the end of June, total assets stood at Rs 1,16,111 crore as against Rs 97,479 crore last year, an increase of 19 per cent. The loan book rose to Rs 1,01,625 crore from Rs 87,046 crore in 12 months ended June 2010.

HDFC’c individual business in the quarter was robust, with approvals growing 56 per cent and disbursements 62 per cent quarter-on-quarter. The high growth rates were partly reflective of a lower base in the previous year, HDFC said.
 

ROBUST NUMBERS Performance in Q1 ended June
(Rs crore)	June 2010	% Chg*
Interest earned	2,797	-1.7
Other income	5	-1.0
Total income	2,802	-1.7
Interest expended	1,720	-12.4
NII	1,078	29.8
Net profit	695	23.0
*Over previous year Data compiled by BS Research Bureau Source : Capitaline

HDFC sold loans amounting to Rs 5,636 crore in the last 12 months.

The mortgage lender improved the spread on loans (over cost of borrowings) to 2.34 per cent in the quarter from 2.31 per cent in the year-ended March 2010. Reflecting better cost management, its interest cost declined by 12.39 per cent to Rs 1,719.59 crore.

According to rating agency ICRA, interest spreads, which are the main source of earning for housing finance companies (given their negligible fee income), are likely to remain low. However, housing finance companies would be able to report reasonable risk-adjusted earnings on the strength of their superior cost structures and controlled credit costs.

The unrealised gains on listed investments amounted to Rs 16,775 crore as against Rs 11,662 crore in the previous year. This excludes the appreciation in the value of unlisted investments. HDFC scrip opened around Rs 3,100 on the Bombay Stock Exchange and touched a high of Rs 3,139. The price, however, declined after the announcement of the results and touched a low of Rs 3,047. It later recovered to close the day at Rs 3,077.