Mortgage lender Housing Development Finance Corporation (HDFC) on Wednesday reported a 37.5% year-on-year (y-o-y) rise in its stand-alone net profit for the June quarter at `1,870.73 crore, owing to a profit of `921.61 crore on sale of investments in Q1 FY17.
During the June quarter, HDFC sold 12,33,57,262 equity shares of `10 each of
HDFC ERGO General Insurance Company to Ergo International AG, resulting in a pre-tax gain of `921.61 crore. “As HDFC ERGO is an unlisted entity, the capital gains tax on the sale of shares was `197 crore, resulting in a post tax profit of `725 crore,” it said in a statement.
HDFC said it utilised the one-off pre-tax gains to shore up the provision for contingencies account and thereby build an additional buffer against any unexpected risk in the future. Accordingly, during the quarter, it made an additional provision of `275 crore against standard assets and other contingencies.
HDFC’s net interest income (NII) for the quarter came in at `2,419.96 crore as against `2,214.02 crore in the same quarter last year, representing a rise of 9.3%.
The lender’s total income for the June quarter stood at `8,382.27 crore, 19.4% higher than in the same quarter last year. Over the same period, the lender’s net interest margin (NIM) fell to 3.8% from 3.9% in the sequential quarter. The spread on loans over the cost of borrowings in Q1 FY17 stood at 2.26% compared to 2.31% in the same period last year. The spread on the individual loan book was 1.92% and on the non-individual book was 3.06%.
Individual loan disbursements grew by 26% during the quarter and the average size of individual loans stood at `25.3 lakh. As at June 30, total assets under management (AUM) stood at `3.01 lakh crore, of which the loan book was `2.65 lakh crore and outstanding loans sold or assigned was`35,745 crore.
During the quarter, HDFC assigned `3,296 crore loans to HDFC Bank and `1,812 crore was assigned or securitised to other banks. In respect of the loans assigned or securitised to the banks other than HDFC Bank, the residual interest is 2% per annum and is recognised over the life of the underlying loans and not on an upfront basis.
Its gross non-performing loans amounted to `2,006 crore or 0.75% of the loan portfolio. While bad loans of the individual portfolio stood at 0.59%, that of the non-individual portfolio stood at 1.11%.
HDFC’s capital adequacy ratio stood at 16.5%, of which Tier I capital was 13.1% and Tier II capital was 3.4%. Shares of the lender on the BSE closed at `1,387.80 on Wednesday, up 1.48% from its previous close.