Mortgage leader HDFC today reported a 13 per cent rise in consolidated net profit at Rs 2,728.66 crore for the December quarter, driven by a healthy improvement in credit off-take and higher margins that to some extent was whittled down by a marginal rise in dud assets.
On a standalone basis, net rose 11.95 per cent to Rs 1,701.21 crore in the third quarter of FY17, while standalone income rose to Rs 8,137.18 crore from Rs 7,268.44 crore.
Consolidated income rose to Rs 14,981.41 crore from Rs 12,253.9 crore a year ago, while the standalone income climbed to Rs 8,137.18 crore from Rs 7,268.44 crore earlier.
While there was a marginal rise in bad loans, with gross NPA rising to 0.81 per cent, or Rs 2,341 crore in absolute terms, from 0.72 per cent a year-ago, Vice-Chairman and CEO Keki Mistry said the numbers are higher because the lender has not taken into consideration the 90-day grace period the regulators have given to borrowers for repayment as well as the grace period given to lenders post the note ban.
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There was a marginal uptick in the NPAs from individual portfolio as well, which constitutes over 70 per cent of the loan book, to 0.65 per cent while that of the non -individual portfolio read 1.16 per cent.
Asked whether this was due to the note-ban, Mistry answered in the negative, saying it is very difficult to day whether there was any impact on individual non-performing loans was because of demonetisation. Some bit of it could be because of demonetisation. But there was no impact of this on the commercial lending side.
“There was some impact on retail loan disbursement after the note ban. Hopefully, things are getting better and my sense is that over the next couple of months we should get back to complete normalcy.”
He said the impact of the interest subvention for small ticket loans should be visible from this quarter once the details are out. “Once the relief scheme is notified, my sense it will give further impetus to growth.”
Mistry said the rise in credit off-take was led by a 23 per cent growth in individual loan book, after adding back the loans sold in the preceding 12 months, leads to a 17 per cent growth on an AUM basis.
The provision stood at Rs 3,198 crore, of which Rs 705 crore is on account of non-performing loans, he said, adding this provision is equivalent to 1.11 per cent of the portfolio.
On his Mistry, said, “As per the NHB norms, we are required to carry a total provision of Rs 2,263 crore of which Rs 1,505 crore is against standard assets, while total provisions as of end December stood at Rs 3,198 crore of which Rs 705 crore is on account of NPAs. This provision is equivalent to 1.11 per cent of the portfolio.”
Meanwhile, the company said it will be raising Rs 35,000 crore through sale of debentures to fund business expansion.
“The Board has approved issuance of secured redeemable non- convertible debentures (NCDs) aggregating to Rs 35,000 crore on private placement basis,” HDFC said in a regulatory filing on stock exchanges. It got shareholder nod for this last July.
The share of profit from subsidiary and associate companies in the consolidated profit after tax stood at 32 per cent for the nine months ended December 2016.
After providing Rs 830 crore for tax, inclusive of Rs 108 crore as deferred tax liability on special reserves, profit after tax for the quarter, stood at Rs 1,701 crore as compared to Rs 1,521 crore in the period previous year, representing a growth of 12 per cent.
Individual loan disbursements grew by 14 per cent during the nine months period with the average size of those loans being Rs 25.75 lakh.
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As of end December, loan book stood at Rs 2,86,876 crore with outstanding individual loans at Rs 37,533 crore.
HDFC, under the loan assignment route, sold individual loans amounting to Rs 3,355 crore in the quarter to HDFC Bank. Individual loans sold/assigned in the preceding 12 months amounted to Rs 15,201 crore.
The growth in the individual loan book, after adding back loans sold in the preceding 12 months was 23 per cent or 15 per cent of net of loans sold. The growth in the total loan book after adding back loans sold was 22 per cent or 16 per cent net of loans sold, Mistry said.
The spread on loans over the cost of borrowings for the nine months stood at 2.34 per cent compared to 2.28 per cent for the half year ended September, 2016. The spread on the individual loan book was 2.02 per cent and on retail book was 3.09 per cent. Its NIM stood at 3.95 per cent.
The HDFC counter closed at Rs 1,368.90, down 0.13 per cent on the BSE, whose benchmark Sensex slipped 0.12 per cent on a tepid trade.