HDFC Q3 net up three-fold to Rs 56.7 bn on part sale of life insurance arm

Loan book up 20% to Rs 3.42 trillion; steps up lending for affordable housing

Mortgage major Housing Development Finance Corporation’s (HDFC) net profit jumped to Rs 56.7 billion (Rs 5,670 crore) in the third quarter ended December 2017 (Q3FY18) on gains from sale of part stake in HDFC Standard Life Insurance Ltd on listing.

It had posted a net profit of Rs 17.01 billion (Rs 1,701 crore) in the third quarter of 2016-17 (Q3FY17).

HDFC's stock closed 2.7 per cent higher at Rs 1,953 per share on the Bombay Stock Exchange. It had touched a 52-day high of Rs 1,982 per share in intra-day trading.

Its net interest income in Q3FY18 rose by 14 per to Rs 29.29 billion (Rs 2,929 crore) from Rs 25.75 billion (Rs 2,575 crore) in Q3 of FY17.

The Corporation received Rs 52.5 billion (Rs 5,250 crore) (net of estimated expenses, which are yet to be fully crystalised) from the initial public offer (IPO) of HDFC Standard Life Insurance Company Limited (HDFC Life).

It has created an additional special provision (as a charge to the statement of profit and loss) of Rs 15.75 billion (Rs 1,575 crore) , being 30 per cent of the pre-tax gains on insurance company stake sale transaction. It has helped to build an additional buffer against any unexpected risk in the future.

Its loan book rose by 19.6 per cent to Rs 3.42 trillion (Rs 3.42 lakh crore) by end of December 2017 from Rs 2.86 trillion (Rs 2.86 lakh crore) a year ago. The Corporation did not sell any loans during Q3FY18. the quarter ended December 31, 2017.

As at December 31, 2017, individual loans comprise 72 per cent of its assets under management (AUM). Seventy per cent of incremental loans came from individual loans and the balance from non-individual loans.

The Corporation has increased its efforts towards loans to the economically weaker section (EWS) and low-income group (LIG). The business in affordable housing segment is now gathering critical mass, said its vice chairman and chief executive director Keki Mistry.

Mistry said the Corporation on an average has been approving 8,000 loans on a monthly basis to the EWS and LIG segment, with monthly average approvals at approximately Rs 13 billion (Rs 1,300 crore).  

The average home loan to the EWS and LIG segment stood at Rs 1.02 million (Rs 10.2 lakh) and Rs 1.73 million (Rs 17.3 lakh) respectively.

The Corporation’s capital adequacy ratio stood at 16.9 per cent, of which Tier-I capital was 14.5 per cent and Tier-II capital was 2.4 per cent.