HDFC net profit up 23% at Rs 368 cr

With robust growth in interest income, Housing Development Finance Corporation (HDFC) has posted 23 per cent rise in its net profits for the second quarter at Rs 368.02 crore as compared with Rs 298.98 crore in the same period last year.

Its interest income rose by 38.41 per cent to Rs 1,446.7 crore in the current quarter over Rs 1,045.2 crore during the same period a year ago.

The home loan approvals moved up by 28 per cent to Rs 14,729 crore at the end of September 2006. The disbursements saw a 27 per cent growth at Rs 11,280 crore from Rs 8,910 crore.

The company was able to maintain profitability despite the rise in cost of funds. The average cost of funds is now over 7 per cent. The rise in costs of funds was partly passed onto customers by upward revision in lending rates by about 100 basis points, said Conrad D'souza, senior general manager, HDFC.

The loan portfolio, including outstanding loans, deposits and investment in shares and debentures, to finance real estate-related project moved up by 25 per cent to Rs 51,332 crore as against Rs 41,065 crore.

The total assets rose by 24 per cent to Rs 56,496 crore from Rs 45,594 crore a year ago.

The housing finance major raised loans from commercial banks amounting to Rs 9,596 crore in April-September 2006. It also raised Rs 3,150 crore through non-convertible debentures.

Its deposits base stood at Rs 11,205 crore at the end of September. HDFC will need Rs 6,000-7,000 crore on a net basis in the second half ending March 2007, D'Souza said.

The capital adequacy ratio stood at 13.5 per cent of risk weighted assets as against minimum requirement of 12 per cent. The tier-I capital adequacy was 8.1 per cent.

The company would raise capital through tier-II subordinated bonds, but the actual amount would depend on the regulatory norms. If the risk weights for assets go up, the amount of capital would also grow in proportion, he said.

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Kelkar joins the board

Vijay Kelkar, former Union finance secretary and chairman of Citi Bank's India Advisory Council, has been appointed as special director on the board of HDFC as Citigroup nominee

Citigroup Strategic Holdings Mauritius Ltd and Citigroup Holdings Mauritius hold 9.27 per cent and 3 per cent stake respectively in HDFC

Kelkar is also on the board of corporates, such as Tata Chemicals, Jet Airways and Lupin