HDFC Ltd profit up 13.42 pct in quarter, growth hurt by low investment gains, squeeze on NIM

Written by PTI | Mumbai | Updated: Jan 22 2014, 23:53pm hrs
HDFCHDFC's net profit rose to Rs 12.8 billion in the December quarter compared with Rs 11.4 billion a year earlier.
Mortgage major HDFC's consolidated net profit in the December quarter rose 13.42 per cent to Rs 1,934.85 crore as an uptick in core interest income was partly offset by lower gains from the sale of investments.

Vice Chairman and Chief Executive Officer Keki Mistry said bottom line growth was pulled down by lower profit from the sale of investments. If not for this dip, profit growth would have been 17 per cent, he added.

The city-headquartered HDFC Ltd said core net interest income increased 17 per cent to Rs 1,905 crore, while other income rose to Rs 12.12 crore from Rs 10.79 crore a year ago.

Total income climbed to Rs 10,052.98 crore during the third quarter from Rs 8,873.25 crore a year ago, and income from operations rose to Rs 6,344 crore from Rs 5,538 crore.

HDFC registered a loan book growth of 19 per cent for the quarter, while for the nine-month period, loans to individuals accounted for 89 per cent of incremental loans, resulting in a 70 per cent share for retail in the overall book.

Dividend and profit on the sale of investments was Rs 110.93 crore as against Rs 141.50 crore in the year-ago period. On a standalone basis, profit from the sale of investments dropped to Rs 34.62 crore from Rs 96.32 crore.

Unrealised gains on the company's listed investments amounted to Rs 33,379 crore.

Brokerages said the results were in line with estimates. HDFC shares gained 0.59 per cent to Rs 842.25 at the close on the BSE, while the 30-share benchmark Sensex gained 0.41 per cent to a record closing level.

Rikesh Parikh of Motilal Oswal Securities said the numbers are in line with his estimates. He said the lender's asset quality has remained healthy over the past several quarters and the trend is likely to continue.

On a standalone basis, HDFC's net profit grew 12 per cent to Rs 1,277.71 crore. Total income rose to Rs 6,019.80 crore from Rs 5,250.40 crore a year earlier.

HDFC's net interest margin was squeezed by 0.06 per cent to 4 per cent for the nine-month period, which Mistry attributed to overall growth in the balance sheet. The company did not provide the Q3 NIM.

Its spreads -- the difference between cost of funds and yields on advances -- improved by 0.08 per cent to 2.28 per cent as the cost of funds declined.

However, Mistry said the cost of funds had not fallen as as much as the industry would want. He declined to indicate where the company's special offers on retail lending, introduced last month, are headed.

The ratio of gross non-performing assets improved marginally to 0.77 per cent at Rs 1,478 crore.

Total provisions, including those for bad loans and standard assets and an excess provisioning of Rs 466 crore, stood at Rs 1,357 crore for the quarter.

Asked about the Rs 460 crore exposure to realty company Hirco, which has been marked as an NPA, Mistry said the issue will get resolved before March. The company had earlier said it has ample security against the exposure.

On the company's plans to borrow USD 300 million overseas, a senior company official said plans are afoot to raise the money by March and added that there is ample liquidity to make the borrowing possible.

Mistry said the Reserve Bank is most likely to hold its key rates at the January 28 policy review, adding that a rate reduction will start only after April, once inflation eases.

As of December 31, the loan book of corporation rose to Rs 1.92 lakh crore as against Rs 1.6 lakh crore at the end of the third quarter of the previous financial year.

Total assets rose to Rs 2,18,286 crore as against Rs 1,83,770 crore, an increase of 19 per cent.

HDFC Q3 net profit rises 12% to Rs 12.8 bn on higher loan growth

(Reuters) Mortgage lender Housing Development Finance Corporation Ltd (HDFC) posted a 12 per cent gain in quarterly net profit, in line with estimates, aided by higher loan growth.

Net profit rose to 12.8 billion rupees ($206.92 million) in the December quarter compared with 11.4 billion rupees a year earlier, HDFC said on Wednesday.

Income from operations increased 16.3 per cent in the fiscal third quarter, while profit from sale of investments fell to 346.2 million rupees from 963.2 million a year earlier.

Total expenditure rose about 15 per cent, largely driven by interest charges, it said.

HDFC faces an intensifying battle for business and market share as banks aggressively push home loans.

The lender has said it is betting on increased loan demand in smaller cities to boost growth in a slowing economy.

Net interest margin for the nine months ended December was at 4 percent, HDFC said. A year-ago comparison was not immediately available.