Housing Development Finance Corporation Ltd (HDFC), India’s largest housing finance company, on Tuesday posted net profit of Rs 1,142 crore for the quarter ended March 31. This was an increase of 23.27 per cent compared with the Rs 926-crore net profit reported in the corresponding quarter a year ago.
Higher income from the sale of investments contributed to the rise in profit. During the quarter, the company reported a profit of Rs 133.5 crore through the sale on investments, compared with Rs 45.4 crore in the year-ago period. The company's total income rose 30.5 percent to Rs 3,785 crore from Rs 2,899 crore in the same period a year ago.
For the financial year ended March 31, 2011, the mortgage lender reported a consolidated net profit of Rs 4,528 crore, up 39.7 per cent from Rs 3,241 crore reported a year ago. The company's total disbursements increased by 19.6 per cent to Rs 60,314 crore, compared with Rs 50,413 crore disbursed a year ago. HDFC's total outstanding loan book as on March 31 stood at Rs 1,17,127 crore, compared with Rs 97,967 crore a year ago.
HDFC's net interest margin improved to 4.39 per cent during the year, from 4.27 per cent in the previous year. The spread on loans over the cost of borrowings stood at 2.33 per cent, compared with 2.31 per cent a year ago. “We have always targeted spreads in the range of 2.15-2.35 per cent. It will continue to be in this range. If spreads remains stable, our net interest margin is also likely to be stable,” said Vice-Chairman and Chief Executive Officer Keki Mistry. HDFC aims to increase its loans by around 20 per cent during the current financial year, he added.
Gross non-performing loans stood at 0.77 per cent of the total loans, against 0.79 per cent a year ago and the company made a total provisioning of Rs 1,124.37 crore, or 0.95 per cent of the total loan portfolio, during year. “In terms of prudential norms as stipulated by the National Housing Bank (NHB), we were required to carry a provision of Rs 813.53 crore, which includes the provisioning of Rs 446.54 crore on standard assets, in respect of housing loans granted under the dual home loan rate scheme,” Mistry said. NHB is the regulator of housing finance companies in India.
The company's capital adequacy ratio stood at 14 per cent as on March 31.
Commenting on interest rates, Mistry said there was an upward bias on interest rates and HDFC would decide on the lending rates at the end of the week.
“With global commodity prices already showing signs of correction, over the next four-six months, inflation is expected to come down, which would reduce the pressure on the Reserve Bank of India to raise key policy rates. The interest rates should then, start coming down,” he said.
Last week, the Reserve bank of India raised key policy rates by 50 basis points on concerns of high inflation and rising global commodity prices, following which, leading public and private sector banks raised lending rates by 50 basis points.
