HDFC profit rises 32% on strong loan, NII growth

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November 02, 2021 1:15 AM

The NII for Q2FY22 stood at Rs 8,255 crore, 17% higher than that in the same quarter in the previous year. The net interest margin (NIM) for the quarter fell 10 basis points (bps) sequentially to 3.6%.

It has over 21 lakh acceptance points, making it among the largest facilitators of cashless payments in the country.It has over 21 lakh acceptance points, making it among the largest facilitators of cashless payments in the country.

Housing Development Finance Corporation (HDFC) on Monday reported a 32% year-on-year rise in its net profit for the September quarter to Rs 3,780 crore, as the lender saw a pick-up in loan growth and net interest income (NII).

The NII for Q2FY22 stood at Rs 8,255 crore, 17% higher than that in the same quarter in the previous year. The net interest margin (NIM) for the quarter fell 10 basis points (bps) sequentially to 3.6%.

Keki Mistry, vice chairman and chief executive officer, HDFC, said there has been a sharp recovery in business from June and this momentum has continued through the second quarter. “Asset quality has improved in this quarter compared to June 2021, particularly in respect of individual loans,” Mistry said. “Growth in housing loans was seen in the affordable segment as well as in the high-income group.”

As of September 30, assets under management (AUM) stood at Rs 5.97 lakh crore, up 10.6% from Rs 5.4 lakh crore at the end of the same quarter in the previous year. Individual loans comprised 78% of the AUM. On an AUM basis, the growth in the individual loan book was 16%.

Mistry said that in the non-individual portfolio, HDFC has seen a pick-up in the loan book during the second quarter, driven significantly by the lease rental discounting component. “Although we continue to report a de-growth as compared to the previous year, we have seen a healthy growth during the quarter ended September 2021. We presently have a good pipeline and we expect to see a positive growth for the full year,” he said.

The company carried provisions worth Rs 13,340 crore as on September 30. As per regulatory norms, the company is required to carry total provisions of Rs 6,605 crore. Of this, Rs 2,844 crore is towards provisioning for standard assets and Rs 3,761 crore towards non-performing assets (NPAs).

The gross NPA ratio fell 24 bps sequentially to 2%. The collection efficiency for individual loans on a cumulative basis in September stood at over 98%.

Mistry said non-performing loans had increased in June due to slippages on account of the second wave of the pandemic. “Since then, we have seen a pullback by about 27 basis points, which reflected the significant recovery from the impact of the second wave,” he said.

As of September 30, loans restructured under the central bank’s two resolution frameworks were equivalent to 1.4% of the loan book. Of the loans restructured, 63% are individual loans and 37% are non-individual loans. Of the total restructured loans, 35% are in respect of one non-individual account. “We are happy to say that we expect nearly 50% of this exposure to be settled in the near future,” Mistry said.

The capital adequacy ratio (CAR) of the lender stood at 22.4%, of which tier-I capital was 21.6% and tier-II capital was 0.8%. As per regulatory norms, the minimum requirements for the CAR and tier-I capital are 15% and 10%, respectively. Shares of HDFC ended at Rs 2,893.25 on the BSE on Monday, 1.74% higher than their previous close.

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