HDFC Q4 standalone net profit soars 40 per cent

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Mumbai | Published: May 3, 2016 5:24:03 AM

Mortgage lender Housing Development Finance Corporation (HDFC) on Monday reported a 40% year-on-year rise in its standalone net profit for the March quarter at R2,607.05 crore, booted by a profit of Rs 1,520 crore on sale of investments in Q4 FY16.

Mortgage lender Housing Development Finance Corporation (HDFC) on Monday reported a 40% year-on-year rise in its standalone net profit for the March quarter at  R2,607.05 crore, booted by a profit of Rs 1,520 crore on sale of investments in Q4 FY16.

In March 2016, HDFC had sold 9% in HDFC Life to Standard Life (Mauritius Holdings) and made a profit of Rs 1,513 crore. “As HDFC Life is an unlisted entity, the capital gains tax on the sale of shares was Rs 300 crore. As a result of the sale of shares, the corporation’s holding in HDFC Life is 61.6%, while Standard Life (Mauritius Holdings) 2006 Ltd’s share is 35%,” it said in a statement.

HDFC’s net interest income (NII) for the quarter came in at around Rs 2,759 crore, against Rs 2,555 crore in the same quarter last year, representing a rise of 8%. During the year, HDFC made an additional one-time provision of Rs 450 crore against standard assets and other contingencies.

“We always created an excess provision in the past. If we have a one-time profit or a profit on sale of an investment in a subsidiary or associate company, we always try and put a certain amount of that into provisioning,” Keki Mistry, vice-chairman and chief executive officer, said in a post-earnings interaction with reporters.

The company’s total income for the March quarter stood at R9,211 crore, 23.7% higher than in the same quarter last year. Over the same period, the lender’s net interest margin (NIM) fell to 3.9% from 4%.

The spread on loans over costs of borrowings for the year ended March 31, 2016 stood at 2.29%, compared with 2.32% in the previous year.

While the spread on the individual loan book was 1.94%, the same on the non-individual book was 3.10%. “The non-individual loans carry a higher spread because the risk weight of a non-individual loan is higher. It requires higher allocation of capital than individual loans,” Mistry said.

The private-sector lender’s balance in the provision for contingencies account as on March stood at R 2,695 crore. Of that, R566 crore was on account of non-performing loans.

HDFC’s capital adequacy ratio as of March stood at 6.6% with a Tier I capital of 13.2% and Tier II capital of 3.4%. Shares of HDFC closed at Rs 1,092.75, up 0.36% from its previous close.

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