HDFC logs ₹2,926 crore third-quarter net profit

CEO sees strong housing loan demand

Housing Development Finance Corporation Ltd. (HDFC) on Tuesday reported third-quarter net profit of ₹2,926 crore. The mortgage lender had posted a profit of ₹8,372 crore in the year-earlier period, which included a fair value gain of ₹9,020 crore following the merger of GRUH Finance with Bandhan Bank.

“The profit numbers for the quarter are not directly comparable with that of the previous year,” HDFC said in a filing.

Net interest income (NII) rose 26% to ₹4,068 crore.

“We continued to see strong demand for housing loans and the growth was much better than what we anticipated,” said CEO Keki Mistry. The demand was strong owing to low interest rates, softer property prices, concessional stamp duty rates in certain States and continued fiscal incentives on home loans, HDFC said.

December witnessed the highest-ever levels in terms of receipts, approvals and disbursements.

“During the quarter the individual loan approval was higher by 32% yoy and loan disbursal was higher by 26% yoy,” Mr. Mistry said.

Growth in home loans was seen in both, the affordable housing segment as well as high-end properties.

As at December 31, 2020, the loans on an assets under management (AUM) basis stood at ₹ 5,52,167 crore as against ₹ 5,05,401 crore in the previous year.

As at December 31, 2020, individual loans comprise 76% of the Assets Under Management (AUM). The individual loan book on an AUM basis grew 10% and the non-individual loan book grew by 7%. The growth in the total AUM was 9%.

As per regulatory norms, gross non-performing loans as at December 31 stood at ₹8,012 crore, or 1.67% of the loan portfolio.

As per regulatory norms, HDFC is required to carry a total provision of ₹ 6,579 crore. The provisions as at December 31 stood at ₹ 12,342 crore.

The provisions carried as a percentage of the Exposure at Default (EAD) is equivalent to 2.56%.

Its capital adequacy ratio stood at 20.9%, of which Tier I capital was 19.9% and Tier II capital was 1.0%.

For the quarter the consolidated profit after tax attributable to HDFC stood at ₹ 5,177 crore as compared to ₹ 3,835 crore in the previous year.

As at December 31, loans worth ₹5,010 crore were being restructured under the RBI’s Resolution Framework for COVID-19 Related Stress.

Cumulative COVID-19 provision as at December 31 stood at ₹959 crore.

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