HDFC net profit plunges 65% to Rs 2926 cr, NII up 26%

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Updated: Feb 03, 2021 8:40 AM

The lender’s capital adequacy ratio stood at 20.9% at the end of the December quarter, compared to minimum regulatory requirement of 14%.

hdfc net profit december quarterThe asset quality of the lender showed an improvement during the December quarter.

Mortgage lender Housing Development Finance Corporation (HDFC) on Tuesday reported a 65% year-on-year (y-o-y) decline in net profit to Rs2,926 crore for the quarter ending December 2020 (Q3FY21). Sequentially, its net profit grew 2%.

However, the net interest income (NII) saw robust growth of 26% YoY and 12% quarter on quarter (QoQ) to Rs4,068 crore. The lender specified that its net profit during the quarter was lower as last year’s numbers had got a boost of Rs9,020 crore due to merger of Gruh Finance with Bandhan Bank in Q3FY20.

Keki Mistry, vice-chairman and CEO of HDFC, said, “To facilitate a like-for-like comparison, the adjusted profit before tax for the quarter ended December 31, 2020, is Rs3,694 crore compared to Rs2,908 crore in the previous year, reflecting growth of 27%.” Mistry said the demand for home loans continued to remain strong. “During the quarter ended December 31, 2020, 91% of individual disbursements entailed property deals entered over the past four months, re-affirming that housing demand remains robust and is not pent-up demand,” he said.

The net interest margin (NIM) for the quarter increased 20 basis points sequentially and 10 basis points YoY to 3.4%. The spread on the individual loan book was at 1.94% and on the non-individual book was at 3.14%.

The collection efficiency for individual loans in December 2020 stood at 97.6% compared to 96.3% in September. The loans on the AUM basis grew 9% YoY to Rs5,52,167 crore, against Rs5,05,401 crore in Q3FY20. Individual loans comprise 76% of the AUM as on December 31, 2020. The individual loan disbursements grew at 26% over the corresponding quarter of the previous year. Growth in home loans was seen in both affordable housing segment and high-end properties, HDFC said. It assigned loans amounting to Rs7,076 crore to HDFC Bank, compared to Rs4,258 crore in the corresponding quarter of the previous year.

The asset quality of the lender showed an improvement during the December quarter. Gross non-performing loans ratio improved 20 basis points to 1.67%, compared to 1.81% in the previous quarter. The non-performing loans of the individual portfolio during the quarter stood at 0.79%, while that of the non-individual portfolio stood at 4%. The quarter saw resolutions in certain non-individual loans, HDFC said. The lender has not classified any fresh non-performing loans since August 31, 2020, due to the interim order of Supreme Court.

“If the Supreme Court order of maintaining the classification of accounts as status quo till further orders were not to be considered, the non-performing loans would have been higher at 1.91% of the loan portfolio; with individual NPLs at 0.98% and non-individuals NPLs at 4.35%,” HDFC said.

The lender’s capital adequacy ratio stood at 20.9% at the end of the December quarter, compared to minimum regulatory requirement of 14%.

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