Housing Development Finance Corporation (HDFC) rose 2.02% to Rs 2,901.35 after the company's standalone net profit jumped 31.91% to Rs 3,780.50 crore on a 4.20% rise in total income to Rs 12,226.39 crore in Q2 September 2021 over Q2 September 2020.
Profit before tax for the quarter ended 30 September 2021 stood at Rs 4,671 crore as compared to Rs 3,532 crore in the corresponding quarter of the previous year, representing a growth of 32% Y-o-Y (year-on-year). After providing Rs 891 crore for tax, the reported profit after tax stood at Rs 3,780 crore.
During the quarter ended 30 September 2021, HDFC assigned loans amounting to Rs 7,132 crore as against Rs 3,026 crore in Q2 FY21 to HDFC Bank. Loans sold in the preceding 12 months amounted to Rs 27,199 crore as against Rs 14,138 crore during the previous year. As at 30 September 2021, the outstanding amount in respect of individual loans sold was at Rs 76,366 crore. HDFC continued to service these loans. The growth in the individual loan book, after adding back loans sold in the preceding 12 months was 23%. The growth in the total loan book after adding back loans sold was 15%.
The collection efficiency for individual loans on a cumulative basis improved to over 98% during the quarter ended 30 September 2021. As per regulatory norms, the gross non-performing loans as at 30 September 2021 stood at Rs 10,341 crore, which is equivalent to 2% of the loan portfolio. As per regulatory norms, the corporation is required to carry a total provision of Rs 6,605 crore. Of this, Rs 2,844 crore was towards provisioning for standard assets and Rs 3,761 crore is towards non-performing assets. The provisions as at 30 September 2021 stood at Rs 13,340 crore. The provisions carried as a percentage of the Exposure at Default (EAD) was equivalent to 2.56%.
During the half-year ended 30 September 2021, individual approvals and disbursements grew by 67% and 80% respectively as compared to the corresponding period in the previous year. The demand for home loans continued to remain strong. Growth in home loans was seen in both - the affordable housing segment as well as in high end properties. The increasing sales momentum and new project launches augured well for the housing sector. Individual disbursements in the month of October 2021 were the highest ever in a non-quarter end month. 89% of new loan applications were received through digital channels.
During the six months ended 30 September 2021, the average size of individual loans stood at Rs 31.9 lakh while for the quarter ended 30 September 2021, the average loan size was worth Rs 32.7 lakh. On 30 September 2021, the assets under management (AuM) stood at Rs 5,97,339 crore as against Rs 5,40,270 crore in the previous year, recording a growth of 10.56% Y-o-Y. As at 30 September 2021, individual loans comprised of 78% of the Assets Under Management (AuM). On an AUM basis, the growth in the individual loan book was at 16% while growth in the total loan book on an AUM basis was 11%.
The Net Interest Income (NII) for the half year ended 30 September 2021 stood at Rs 8,255 crore as compared to Rs 7,039 crore in the previous year, representing a growth of 17% Y-o-Y. Inclusive of income from assigned loans, the NII for the half-year ended 30 September 2021 stood at Rs 8,650 crore compared to Rs 7,381 crore in the previous year, registering a growth of 17% Y-o-Y.
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The spread on loans over the cost of borrowings for the half ended 30 September 2021 was at 2.29%. The spread on the individual loan book was 1.93% and on the non-individual book was 3.37%. The reported Net Interest Margin (NIM) stood at 3.6%.
As per the company's media release, all investments in the corporation's subsidiary and associate companies were carried at cost and not at fair value. Accordingly, as at 30 September 2021, the unaccounted gains on listed investments in subsidiary and associate companies amounted to Rs 2,75,917 crore.
For the half-year ended 30 September 2021, the cost to income ratio stood at 8.2% compared to 8.5% in the previous year. As at 30 September 2021, the corporation's capital adequacy ratio stood at 22.4%, of which Tier I capital was 21.6% and Tier II capital was 0.8%. As per regulatory norms, the minimum requirement for the capital adequacy ratio and Tier I capital is 15% and 10% respectively.
Meanwhile, as COVID-19 lockdown restrictions get eased, all offices of the corporation have opened for business and continue to follow the necessary hygiene protocols and safety precautions. The corporation had organised various vaccination camps for the staff and their family members. The key risks to business remains another wave of infections and variants of the virus.
As at 30 September 2021, loans restructured under the RBI's Resolution Framework for COVID-19 Related Stress (OTR 1 & 2) was equivalent to 1.4% of the loan book on comparison to 0.9% of the loan book as at 30 June 2021. Of the loans restructured, 63% are individual loans and 37% are non-individual loans. Of the total restructured loans, 35% is in respect of just one account. As at 30 September 2021, loans disbursed under the Emergency Credit Line Guarantee Scheme stood at Rs 1,738 crore. Cumulative COVID-19 provision as at 30 September 2021 was Rs 1,304 crore. The corporation stood comfortable on liquidity, HDFC stated.
HDFC is engaged in financing by way of loans for the purchase or construction of residential houses, commercial real estate and certain other purposes, in India. HDFC's distribution network spans 616 outlets which include 202 offices of HDFC's distribution company, HDFC Sales (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 and third party direct selling associates. The corporation also has online digital platforms for loans and deposits. To cater to non-resident Indians, HDFC has offices in London, Dubai and Singapore and service associates in the Middle East.
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