HDFC, the country’s largest housing finance company, today reported a 15.73 per cent decline in its third quarter net profit to Rs 546.83 crore as against Rs 648.93 crore registered in the corresponding period last year.
However, excluding a one-time gain of Rs 93.80 crore — which included gain from tax related to the sale of entire stake in Intelenet Global — and other income of Rs 83.23 crore, the mortgage company’s profit for the period increased by 14.85 per cent. Though the firm’s net profit showed a drop, its operating profit increased by 18.70 per cent to Rs 774.51 crore as against Rs 652.45 crore.
HDFC said that its income shot up by 42.54 per cent to Rs 2,917.77 crore from Rs 2,046.93 crore. Interest income is 42.71 per cent higher at Rs 2,827.97 crore as against Rs 1,981.51 crore, whereas expenses on interest payment and other charges increased by 55.22 per cent to Rs 2,042.70 crore compared with Rs 1,315.96 crore reported a year ago.
“This quarter the interest cost was high and we had stopped giving loans to non-individuals from October-end to November. However, in the last two months, with property prices falling across the country, the loan enquiries have significantly increased,” said HDFC Vice-Chairman and Managing Director Keki Mistry.
| SLOWDOWN HURTS Performance for Q3 ended Dec 31 | |||
| Year | HDFC | ||
| Dec-2007 | Dec-2008 | % Chang | |
| Interest earned | 2150.35 | 2919.27 | 35.76 |
| Other income | 125.31 | 5.57 | -95.56 |
| Operating expenses | 1390.07 | 2138.72 | 53.86 |
| Operating profit | 885.59 | 786.12 | -11.23 |
| Net profit | 648.93 | 546.83 | -15.73 |
| NPM % | 30.18 | 18.73 | |
| Source: Capitaline | |||
The loan book of HDFC swelled by 23.77per cent to Rs 82,896 crore as against Rs 66,976 crore last year. The company’s total assets for the reporting quarter grew by 26.41 per cent to Rs 95,112 crore as against Rs 75,240 crore as on December 2007, while its deposit base jumped by 56.57 per cent to Rs 17,551 crore as against Rs 11,209 crore in the year-ago period.
For the nine months ended December 31, 2008, deposits accounted for 55 per cent of its incremental borrowing, the company said. During the December 2008 quarter, the net non-performing loans (NPLs) stood at 1.02 per cent compared with 1.12 per cent in the year-ago period.
“The balance in the provision for contingencies account stood at Rs 497.51 crore, which is 1.9 times the regulatory requirement as stipulated by the National Housing Bank. This has been the lowest level of non-performing loans seen in December for any year in the last decade,” said an HDFC release.
During the quarter, the spreads of HDFC was at 2.10 per cent, which in line with its expected range of 2.10-2.20 per cent. The yields on advances stood at 12.07 per cent and cost of funds were about 9.88 per cent.
While total approvals for the nine months ended December 31, 2008, went up by 15 per cent to Rs 33,820 crore from Rs 29,376 crore, disbursement stood at Rs 27,211 crore, an increase of 22 per cent, compared with Rs 22,285 crore reported in the corresponding year-ago period.
In the same period, HDFC’s net profit was 7.13 per cent lower at Rs 1,549.17 crore against Rs 1,668.13 crore, which included gains from the sale of Intelenet. Excluding the exceptional item last year, which amounted to Rs 434.19 crore, its profits were 24.47 per cent higher. HDFC’s capital adequacy ratio stood at 15.2 per cent, with Tier-I capital adequacy accounting for 14.1 per cent.
