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Housing Development Finance Corporation (HDFC), India’s largest mortgage lender, posted an eight per cent year-on-year growth in standalone net profit for the March quarter at Rs 1,862.43 crore, due to growth in loan book and improvement in asset quality.
The mortgage financier saw a pick up in the demand for non-individual lending, as the ratio between individual loans and non-individual loans changed to 78 per cent and 22 per cent, respectively, from 85 per cent (individual) and 15 per cent (non-individual) in the previous financial year.
Profit was arrived at after charging Rs 119.77 crore towards deferred tax liability (DTL) on a special reserve created during the year. National Housing Bank (NHB) had stipulated that housing finance companies should create DTL on creation of special reserve. Profits without the deferred tax liability recorded a growth of 15 per cent at Rs 1,982.20 crore.
“The outstanding loan book at the end of the year (March 2015) stood at Rs 2.28 lakh crore compared with Rs 1.97 lakh crore as on March of 2014. But this growth of 16 per cent has been calculated after reducing the loans sold during the last 12 months. So if we take the whole financial year, we have sold loans aggregating to Rs 8,249 crore. Out of that, in the fourth quarter itself, we have loans aggregating to Rs 5,000 crore,” said Keki Mistry, vice-chairman and CEO of the corporation.
“We do not book profits upfront for loans sold and hence this is also a separate stream of income for us. Growth will remain strong due to increasing urbanisation, government’s push to smart cities, which will increase housing loans, low penetration of housing loans in India and favorable demographics of Indian population.”
According to Mistry, non-individual loan growth is likely to improve as investment cycle increases.
Gross non-performing loans has been coming down for the corporation. Gross non-performing loans as at March 31, 2015, amounted to Rs 1,542 crore. This is equivalent to 0.67 per cent of the loan portfolio, against 0.69 per cent as on March 31, 2014. Non-performing loans of the individual portfolio stood at 0.51 per cent, while those of the non-individual portfolio stood at 1.01 per cent. “Our gross non-performing loan number stood at 67 basis points, which compares to 69 bps both in March 2014 and December 2014,” said Mistry.
Net interest income for the quarter stood at Rs 2,534 crore compared to Rs 2,232 crore in the previous year, an increase of 14 per cent. This includes dividend income.
For the financial year, the corporation’s standalone profit recorded a growth of 10 per cent to Rs 5,990.14 crore. During the year, DTL stood at Rs 364.77 crore.
Spread for the year stood at 2.32 per cent, up by 3 bps compared with last year’s 2.29 per cent. Spread is the weighted average difference between the cost of funding and the rate at which loans have been given.
“Capital adequacy ratio in the aggregate would be 16 per cent, out of which Tier-I capital would be 12.3 per cent and Tier-II capital would be 3.7 per cent,” said Mistry.
For the year ended March 31, 2015, the consolidated profit after tax stood at Rs 8,763 crore, recording a growth of 10.25 per cent compared with the corresponding period of the previous year.
