HDFC Ltd Q4 profit declines 10 pc to Rs 4,342 cr

Housing finance firm HDFC Ltd on Monday reported a 10 per cent decline in consolidated net profit to Rs 4,341.58 crore for the fourth quarter ended March 31.

The company's net profit (before adjustment of minority interest) was Rs 4,811.26 crore in January-March quarter of 2018-19.

The board has proposed a dividend of Rs 21 per share of the face value of Rs 2 per unit, HDFC Ltd said in a regulatory filing.

On standalone basis, the profit of HDFC during the quarter slipped by 22 per cent at Rs 2,232.55 crore as against Rs 2,861.58 crore in the same quarter previous fiscal.

"After providing for tax of Rs 460 crore, the reported profit after tax for the quarter ended March 31, 2020 stood at Rs 2,233 crore and for the whole year it was Rs 17,770 crore.

"In the fourth quarter, the factors that impacted the result include - extra provisioning due to COVID-19 requirement, dividend income was Rs 2 crore compared to Rs 537 crore last year and profit on sale of investments was Rs 2 crore as against Rs 321 crore," HDFC Ltd vice chairman and CEO Keki Mistry said via video conference.

During the quarter, the net interest income improved to Rs 3,780 crore compared to Rs 3,161 crore in the corresponding quarter previous year.

For the full fiscal, the net profit on standalone basis nearly doubled to Rs 17,769.65 crore as against Rs 9,632.46 crore.

However, HDFC Ltd in a statement said the profit numbers for the year are not directly comparable with that of the previous year due to various reasons, including additional provisioning for the impact of COVID-19 of Rs 5,913 crore as against Rs 935 crore in the previous fiscal.

"The gross non-performing loans as at March 31, 2020 stood at Rs 8,908 crore. This is equivalent to 1.99 per cent of the loan portfolio. The non-performing loans of the individual portfolio stood at 0.95 per cent while that of the non-individual portfolio stood at 4.71 per cent," it said.

As per National Housing Bank (NHB) norms, it said, the company is required to carry a total provision of Rs 4,188 crore. Of this, Rs 1,921 crore is towards provisioning for standard assets and Rs 2,267 crore is towards non-performing assets.

During FY20, it had profit of Rs 3,524 crore on sale of investments, which was not there in the previous year and it had a fair value gain of Rs 9,020 crore due to amalgamation GRUH Finance Limited (GRUH) with Bandhan Bank.

Mistry further said due to the external environment, the corporation kept a huge amount of liquidity in the balance sheet.

"We have been slowly building up liquidity. Against the liquidity level of Rs 6,000 crore last year, this year in the balance sheet we were carrying as much as Rs 30,000 crore of liquidity. The excess liquidity which we carry gives us a negative carry in the P&L," he added.

Net interest income for the quarter ended March 31, 2020 grew by 17 per cent to Rs 3,780 crore.

Net interest margin stood at 3.4 per cent, compared to 3.3 per cent in the previous year.

Gross non-performing loans as on March 31, 2020 stood at Rs 8,908 crore, which is equivalent to 1.99 per cent of the loan portfolio.

Non-performing loans of the individual portfolio stood at 0.95 per cent, while that of the non-individual portfolio stood at 4.71 per cent.

On the basis of classification of assets under Ind AS, as on March 31, 2020, 97.7 per cent of the exposure at default (EAD) comprised stage 1 and 2 assets.

Total individual loan approvals grew by 14 per cent in volume terms and 12 per cent in value terms.

As on March 31, 2020, the loan book stood at Rs 4,50,903 crore as against Rs 4,06,607 crore in the previous year, representing a growth of 11 per cent.

Individual loans comprise 76 per cent of the assets under management (AUM).

Its capital adequacy ratio stood at 17.7 per cent, of which tier I capital was 16.6 per cent and tier II capital was 1.1 per cent.