By Kshipra Petkar
HDB Financial Services’ net profit for the quarter ended June fell over 2% on year to Rs 568 crore due to a sharp rise in loan loss provisions, gross stage-3 assets and lower disbursements. Sequentially however, the net profit rose by 7%. This is first quarterly earnings of the non-bank lender after listing on the stock exchanges.
The asset quality of the non-bank lender deteriorated on year as well as on a sequential basis. The gross NPA ratio increased to 2.56% as on June 30, as compared to 1.93% a year ago and net NPA ratio too inched up to 1.11% as against 0.77% a year ago. Provision coverage ratio of the lender rose by 75 basis points on a sequential basis to 56.70% as on June 30. The loan loss provisions of the bank jumped over 60% to Rs 670 crores in the quarter ended June. The credit costs too inched up to 2.5% from 1.8% a year ago.
Gross loans of the non-bank lender grew 14.3% on year to over Rs 1 lakh crore as on June 30. Sequentially, the loans grew by 2.3%. The disbursements for the quarter fell to Rs 15,171 crores from Rs 17,643 crores as on March 31. This was mainly due to a fall in disbursements in enterprise lending and asset finance and rise in lending to consumer finance. As on June 30, consumer finance formed 45% of total disbursements, as per the investor presentation.
The revenue from operations rose 15% on year to Rs 4,465 crore in April-June. Net interest income of the non-bank lender grew 18% on year to Rs 2,092 crore for the quarter ended June. The net interest margin for April-June was 7.7% as against 7.6% reported a quarter ago. The non-interest income fell by 2.8% on quarter.
The asset under management was Rs 1.09 trillion as on June 30, a growth of 14.7% on a year-on-year basis. The expenses of the company rose 20.4% on year to Rs 3,733 crore for the reporting quarter. This was mainly on the back of rising finance costs and impairment on financial instruments.
The capital adequacy ratio of the bank increased to 20.18% from 19.22% as on March 31. Shares of HDB Financial closed at Rs 841.15, down 0.3% on the National Stock Exchange on Tuesday.