Mortgage lender HDFC on Wednesday reported a 16.8% year-on-year (y-o-y) fall in its standalone net profit for the June quarter at Rs 1,555.7 crore. HDFC’s net interest income (NII) for the quarter came in at Rs 2,793.3 crore as against Rs 2,417.9 crore in the same quarter last year, representing a rise of 15.5%. Its standalone profit before tax (PBT) was down 12.6% year-on-year (y-o-y). HDFC said in a statement that the effective tax rate in the June quarter was higher at 34%, compared to 30.7% in the corresponding quarter last year. The lender’s total income for the quarter stood at Rs 8,141.76 crore, 3% lower than the same quarter last year. Its net interest margin (NIM) in the latest quarter remained unchanged at 4%. The spread on loans over the cost of borrowings in Q1FY18 stood at 2.29%, compared to 2.26% in the June quarter of FY17. The spread on the individual loan book was 1.90% and on the non-individual book was 3.18%.
On an assets under management (AUM) basis, the growth in the individual loan book was 16%, while it was 23% in the case of the non-individual loan book, thus taking the growth in the total loan book to 18%. The lender said individual loans comprise 72% of its AUM. During the June quarter, 64% of incremental loans came from individual loans and 18% each from commercial lease rental discounting and construction finance. As on June 30, the loan book stood at Rs 3.12 lakh crore as against Rs 2.65 lakh crore in the previous year.
In the June quarter, HDFC sold individual loans of Rs 2,922 crore, of which Rs 2,458 crore was assigned to HDFC Bank and Rs 464 crore was assigned to another bank. HDFC said it has exposure of Rs 909 crore as on June 30 in one of the 12 accounts identified by the RBI to be resolved under the Insolvency and Bankruptcy Code (IBC). “As on March 31, 2017, though the account was not a non-performing loan, as a prudent measure, the corporation had made adequate provisioning against this exposure. Thus, no further provisioning was required on this exposure for the quarter ended June 30,” it said.
HDFC’s gross non-performing loans stood at Rs 3,513 crore or 1.12% of the loan portfolio.