The consolidated profit after tax stood at Rs 2,204 crore as compared to Rs 1,873 crore in the corresponding quarter last year, representing a growth of 18%.
HDFC is one of India’s biggest financiers of real estate. It has been able to report good growth in recent years due to a boom in real estate prices, and activity, in the country.
However, with the real estate sector facing a slow-down, and possibly a correction, in recent months, analysts are watching for any rise in the number of delinquencies, or any other slowdown in lending.
By the end of the Apr-Jun quarter, HDFC’s gross non-performing loans amounted to Rs 1,609 crore, the company said.
However, on a year-on-year basis, non-performing assets did not increase.
“This is equivalent to 0.69% of the loan portfolio (previous year – 0.70%). The non-performing loans of the individual portfolio stood at 0.54% while that of the non-individual portfolio stood at 1.04%,” it said.
HDFC also added that the financial results for the quarter ended June 30, 2015 are not comparable with the corresponding quarter of the previous year.
The Corporation holds 21.6% of the equity share capital of HDFC Bank.
“HDFC Bank declared a dividend of Rs 8 per share for FY 2015. The Annual General Meeting of HDFC Bank was held on July 21, 2015, post which the dividend payout was made. Consequently, the income from dividend from HDFC Bank of Rs 315 crore would be booked in the second quarter of the financial year. In the previous year, dividend from HDFC Bank amounting to Rs 269 crore was received in the first quarter. Hence the quarter financials are not comparable.”
As at June 30, 2015, the total assets of HDFC stood at Rs 2,57,739 crore as against Rs 2,30,053 crore as at June 30, 2014 – an increase of 12%.
As at June 30, 2015, the loan book stood at Rs 2,31,224 crore as against Rs 2,03,384 crore as at June 30, 2014. Loans sold in the preceding twelve months amounted to Rs 10,949 crore. After adding back the loans sold in the preceding 12 months, the growth in the individual loan portfolio is 23%. The growth in the non-individual loan portfolio stood at 10%. The growth in the total loan book after adding back the loans sold in the preceding 12 months is 19%.
Of the total loan book, individual loans comprise 72%. The average size of the individual loans stood at Rs 23.4 lac.
As at June 30, 2015, the total loans outstanding in respect of loans sold/assigned stood at Rs 27,764 crore. HDFC continues to service these loans and is entitled to the residual interest on the loans sold. The residual interest on the individual loans sold is 1.24% p.a. and is being accounted over the life of the loans and not on an upfront basis.
As per NHB norms, the Corporation is required to carry a total provision of Rs 1,742 crore.
The balance in the provision for contingencies account as at June 30, 2015 stood at Rs 2,082 crore of which Rs 499 crore is on account of non-performing loans and the balance Rs 1,583 crore is in respect of general provisioning on standard loans and other provisions. This balance in the provision for contingencies is equivalent to 0.89% of the portfolio. Thus the Corporation carries an additional provision of Rs 340 crore over the regulatory requirements.
Spread and Net Interest Margin
The spread on loans over the cost of borrowings for the quarter ended June 30, 2015 stood at 2.31% compared to 2.29% in the corresponding quarter previous year.
Net Interest Margin for the quarter ended June 30, 2015 was 3.8%.
As at June 30, 2015, the unrealised gains on HDFC’s listed investments amounted to Rs 57,958 crore (previous year Rs 43,431crore). This excludes the appreciation in the value of unlisted investments.
The Corporation’s capital adequacy ratio (CAR) after reducing the investment in HDFC Bank from Tier I capital stood at 15.8%. Of this, Tier I capital was 12.4% and Tier II capital was 3.4%. Deferred Tax Liability on Special Reserve has been considered as a deduction in the computation of Tier I and Tier II capital.
The CAR without reducing the investment in HDFC Bank from Tier I capital, while treating it as a 100% risk weight stood at 18.2%. Of this, Tier I capital was 14.9% and Tier II capital 3.3%. As per the regulatory norms, the minimum requirement for the capital adequacy ratio and Tier I capital is 12% and 6% respectively.
HDFC’s distribution network spans 382 outlets which include 104 offices of HDFC’s distribution company, HDFC Sales Private Limited (HSPL). HDFC covers additional locations through its outreach programmes. Distribution channels form an integral part of the distribution network with home loans being distributed through HSPL, HDFC Bank Limited and third party direct selling associates.
To cater to non-resident Indians, HDFC has offices in London, Dubai and Singapore and service associates in Kuwait, Oman, Qatar, Abu Dhabi and Saudi Arabia.