Mortgage lender HDFC Monday reported a 27 per cent increased in standalone net profit to Rs 2,862 crore for the quarter ended March, mainly due to healthy growth in balance sheet and better asset quality.
It had reported a profit after tax of Rs 2,257 crore for the same quarter last year.
"Overall the balance sheet has grown. Spreads have moved up and non-performing loans have come down a little bit," its Vice-chairman and CEO Keki Mistry told reporters.
For the year 2018-19, it reported a profit after tax of Rs 9,633 crore as against Rs 10,959 crore in FY2017-18.
The profit numbers for the fiscal 2019 are not comparable with that of FY2018.
"The higher profit in the previous year is on account of profit of Rs 5,265 crore on sale of its stake in HDFC Life," Mistry said.
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The spread on loans over the cost of borrowings for the year ended March 31, stood at 2.30 per cent.
The spread on the individual loan book was 1.91 per cent and on the non-individual book, it was 3.17 per cent. Net interest margin stood at 3.3 per cent, same as in the previous year.
Net interest income (NII) grew 19 per cent to Rs 3,161 crore in the quarter as against Rs 2,650 crore in the year-ago quarter.
The gross non-performing loans stood at Rs 4,777 crore or 1.18 per cent of the loan portfolio.
The non-performing loans of the individual portfolio stood at 0.70 per cent, while that of the non-individual portfolio stood at 2.34 per cent. Its total individual loan disbursements grew by 15 per cent.
On an assets under Management (AUM) basis, the growth in the individual loan book was 17 per cent. As of March-end, the loan book stood at Rs 4,06,607 crore as against Rs 3,62,811 crore in the previous year.
The lower growth in the loan book was due to the unfavourable lending environment for non-individual loans that prevailed in the second half of the financial year, the company said.
Tight liquidity conditions, over leverage and credit rating downgrades led to heightened risks across the corporate sector, it said.
In order to preserve asset quality, the company opted to be prudent by curtailing some of its lending to non-individual loans.
It said the loan book also reflects a lower growth because loans sold during the year were significantly higher at Rs 25,150 crore, compared to Rs 6,453 crore in FY2018.
Loans sold in FY2019 included a backlog of advances of the previous year.
Mistry said there were no loans sold in the second half of FY18 as certain regulatory clarifications pertaining to the Goods and Service Tax were awaited.
As on March 31, 2019, the outstanding amount in respect of individual loans sold was Rs 54,601 crore.
Its capital adequacy ratio stood at 19.2 per cent, of which tier I capital was 17.6 per cent and tier II capital was 1.6 per cent.
The board has proposed a final dividend of Rs 17.50 per share and the proposed final dividend is in addition to the interim dividend of Rs 3.50 per share declared by the board of directors on March 6, 2019, HDFC said in a statement.
The total dividend for the year is Rs 21 per share as against Rs 20 per share for the previous year.
Besides, the board has also approved issuance of redeemable non-convertible debentures or any other hybrid instruments not in nature of equity shares up to Rs 1.25 lakh crore on private placement basis to fund its business growth.
The company has also approved re-appointment of Nasser Munjee and J J Irani as independent directors for a term of two consecutive years each with effect from July 21, 2019.
"The corporation has adopted Indian Accounting Standards (Ind AS) from April 1, 2018, and the effective date for such transition is April 1, 2017. Accordingly, the standalone and the consolidated financial statements for the financial year ended March 31, 2019, have been prepared in accordance with Ind AS specified under the Companies Act, 2013 and other relevant provisions of the Companies Act, 2013," the company said.
Shares of HDFC ended up 1.06 per cent at Rs 1,951.70 apiece on the BSE.
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