HDFC net up 25% on robust disbursals

Housing Development Finance Corporation (HDFC) has registered a 25 per cent growth in net profit in the first quarter ended June 30 to Rs 372.81 crore from Rs 296.82 crore a year earlier on robust growth in disbursals despite interest rate increases.

In the month of March this year, HDFC had raised rates on home loans for existing and new borrowers. Floating rates had gone up by 75 basis points, while interest rates for customers seeking fixed loans was increased by 100 basis points from 11 per cent to 12 per cent. HDFC's revised prime lending rate (PLR) is 13.5 per cent against 12.75 per cent.

Since the company has raised its lending rates, interest income for the quarter grew by 50.98 per cent to Rs 1,724.15 crore from Rs 1,141.92 crore in the same period a year earlier.

Total income, which included interest income, other operating income, and other income, grew by 46.6 per cent at Rs 1830.39 crore compared with Rs 1248.53 crore in the same quarter of last year. 
 

Rs crore	Quarter ended June		% chg
	2006	2007
Interest earned	1,245.7	1,826.9	46.7
Other income	2.8	3.4	21.4
OP	380.4	508.7	33.7
PBT	376.7	505.0	34.1
Net profit	296.8	382.8	29.0
EPS (Rs)	11.9	14.7	23.8

Other income, which is primarily fee based business, stood at a total of Rs 3.44 crore a growth of 22.41 per cent over Rs 2.81 crore a year earlier. Other operating income for the quarter fell by 0.96 per cent at Rs 102.80 compared with Rs 103.80 in the same quarter of last year.

Total expenditure shot up to Rs 1321.68 crore against Rs 868.08 crore last year. Major part of the expenditure consisted of interest and other charges which stood higher at 1245.14 crore ( 801.41 crore).

Approvals during the quarter increased by 29 per cent to Rs 7,713 crore compared with Rs 5,998 crore during the corresponding period in the previous year. Disbursements during the quarter amounted to Rs 5,645 crore compared with Rs 4,386 crore during the corresponding period in the previous year- representing an increase of 29 per cent.

The loan portfolio, inclusive of investment in debentures and inter-corporate deposits for financing real estate projects, as on June 30 this year amounted to Rs 60,485 crore compared with Rs 49,234 crore, as on the same period of the previous year.

Net Profit on sale of investments and income from leases fell to Rs 26.04 crore compared with Rs 51.07 a year earlier.

Conrad D'Souza, senior general manager, treasury for HDFC, "The 29 per cent growth in disbursements is in line with our expectations. The disbursements have grown in line with our expectations."

Asked if HDFC will reduce deposit rates like banks, he said, "We are not offering high deposit rates like banks."

As to why has the other operating income fallen, he said, " Its because of the lower amount of investments. The amount of investments were lower as our disbursements were higher."

If rates will soften this year, he said, "We will have to wait till the credit policy."