Housing Development Finance Corporation (HDFC) on Wednesday reported an 8% y-o-y rise in Q4 net profit to R1,862.4 crore after making a special reserve for deferred tax liability (DTL) of R119.7 crore. The rise in the net profit was aided by a higher loan growth.
Its net interest margin (NIM), a key measure of profitability, stood at 4% in FY15 compared with 4.06% in the previous year. “Since we do not raise capital every year, but the dividend payout ratio is high, we are not ploughing back enough profits into the reserves but are paying out the money as dividends. Since the business is funded largely out of debt, the net interest margin should arithmetically decline 5-6 bps y-o-y,” said HDFC CEO Keki Mistry. The mortgage lender’s net interest income (NII) stood at R2,461 crore in Q4 FY15 compared with R2,260 crore in Q4 last year.
As of March 31, the loan book stood at R2.28 lakh crore, up 16% from R1.97 lakh crore in the same period last year.
The growth in the individual loan book, after adding back loans sold was 23% (17% net of loans sold) and the growth in the non-individual loan portfolio stood at 14%. HDFC said its total loan book saw a growth of 20% after adding loans sold.
The lender has also seen a change in the composition of the loan book with the ratio of individual to non-individual loans at 78:22 compared with 85:15 last year. “This growth of 16% has been calculated after reducing the loans sold in FY15. If you take the whole financial year, we have sold loans aggregating to R8,249 crore,” said Mistry.
He said if the loans sold are added and then calculated the growth numbers, the individual loan book growth has been 23%. “When we sell a loan, we do not book profit upfront. The customer continues to pay instalments and of the instalments we receive, interest is paid back to the entity at which the loan was sold and then keep the balance with us,” Mistry explained.
Gross non-performing loans at the end of the March quarter was a tad lower at 0.67% of the loan portfolio compared with 0.69% last year. The non-performing loans of the individual portfolio stood at 0.51% while that of the non-individual portfolio stood at 1.01% of total loans.