HDFC net soars nearly 4 times on Gruh Finance stake sale Bandhan Bank

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Published: January 28, 2020 12:47:40 AM

Gross non-performing loans (NPLs) at the end of December stood at Rs 5,950 crore, up 5.2% from Rs 5,655 crore in Q2FY20.

At the operational level, HDFC’s net interest income (NII) stood at Rs 3,428 crore, including expected profits from securitised assets, up 7.5% from Rs 3,189 crore a year ago.

Mortgage major Housing Development Finance Corporation (HDFC) on Monday reported a 296% year-on-year (y-o-y) rise in its net profit to Rs 8,372.5 crore, on account of a fair value gain of Rs 9,020 crore from the stake sale of Gruh Finance to Bandhan Bank. “There has been no profit on sale of investments in the current quarter. However, under the IndAS accounting rules, we have accounted for a gain of Rs 9,020 crore on conversion of the shares of Gruh Finance into Bandhan (Bank),” said Keki Mistry, vice-chairman and CEO, HDFC, during the earnings call.
HDFC was allotted 15.94 crore shares aggregating 9.9% of the total issued share capital of Bandhan Bank. Gruh Finance had merged with Bandhan Bank with effect from October 17.

At the operational level, HDFC’s net interest income (NII) stood at Rs 3,428 crore, including expected profits from securitised assets, up 7.5% from Rs 3,189 crore a year ago. However, NII, when calculated as difference between interest earned and interest expended excluding profits from securitised assets, grew 8.6% to Rs 3,240 crore. Net interest margin for the quarter stood unchanged at 3.3%.

As of December 2019, HDFC’s loan book grew 13% y-o-y to Rs 4.41 lakh crore. Individual loans were 76% of total loans, while construction finance had a share of 11%, lease rental discounting accounted for 8% and corporate loans comprised 5% of total loans. Mistry said the firm remained cautious on non-individual loans.

On an AUM (assets under management) basis, the growth in the individual loan book was 16%. The company assigned loans amounting to Rs 18,648 crore, against Rs 22,732 crore a year ago.

Gross non-performing loans (NPLs) at the end of December stood at Rs 5,950 crore, up 5.2% from Rs 5,655 crore in Q2FY20. This is equivalent to 1.36% of the loan portfolio. The NPL in the individual portfolio stood at 0.75%, while that in the non-individual portfolio stood at 2.91%. The provisions as at December 31, 2019, stood at Rs 9,934 crore, against the statutory requirement of Rs 3,624 crore.

The capital adequacy ratio stood at 18.6%, of which tier-I capital was 17.3% and tier-II capital was 1.3%. The board of directors also granted their approval for issuance of secured redeemable non-convertible debentures aggregating Rs 45,000 crore in various tranches on a private placement basis.

Shares of HDFC fell 2.25% on Monday to Rs 2,395.8 crore from the previous close.

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