HDFC net up 17%, income rises 9%

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SummaryGross NPAs at R1,371 crore, up 14.3% sequentially; share tanks 2.35%

Housing Development Finance Corporation (HDFC) on Friday reported a net profit of R1,173 crore for the quarter ended June 30, up 17% from a year ago. Total income during the quarter rose 8.87% year-on-year to R5,562.56 crore.

For the quarter ended June 30, the consolidated profit after tax stood at R1,707.10 crore, up 34% in the same period last year. The consolidated result includes profit of subsidiaries such as HDFC Bank, HDFC Standard Life, HDFC Ergo General Insurance, HDFC Venture Capital and Gruh Finance.

As on June 30, the total assets of HDFC rose 16% compared with the same period last year to R2,02,268 crore. The company's loan book stood at R1,76,993 crore as on June 30, up 19.4% year-on-year.

The spread on loans over the cost of borrowings for the quarter stood at 2.29%, while net interest margin for the quarter was 3.9% compared with 4.2% as on March 31.

“As the year progresses, the ratio of debt on the balance sheet increases and therefore the weighted average cost of funds goes up, reducing the net interest margin. To offset this, we sell loans every year. We expect margins to be in the 3.8-4.1% range,” said Keki Mistry, vice-chairman and chief executive oficer, HDFC.

Loans sold in the preceding twelve months amounted to R6,310 crore, the company said. The growth in the individual loan book, after adding back loans sold stood at 31%.

Of the total loan book, individual loans comprise 70%. The incremental growth in the loan book of R8,081 crore was attributable to the growth in individual loans, HDFC said in a statement.

As on June 30, the company's provisions for contingencies stood at R1,801 crore, compared with the regulatory requirement of R1,326 crore. This is the equivalent to 1.02% of the portfolio, HDFC said. Gross non-performing loans during the quarter amounted to R1,371 crore, up 14.3% sequentially. This is equivalent to 0.77% of the loan portfolio, about 7 basis points higher than the previous quarter.

"There are structural and seasonal reasons involved. Typically in March the non-performing loans are at their lowest. So it would be unfair to compare these numebrs," Mistry

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