Housing Development Finance Corporation Ltd. (HDFC) reported a 21.6 percent decline in net profit in the January-March quarter of the financial year 2016-17. This is the first profit decline in eight years owing to a high base.
Net profit on a standalone basis fell to Rs 2,044.2 crore, according to its stock exchange filing. The Rs 2,607 crore profit in the corresponding quarter last year included a one-time gain of Rs 1,513.4 crore from the sale of its stake in HDFC Standard Life Insurance Company. HDFC was expected to report a Rs 2,023 crore profit, according to the consensus estimate of analysts tracked by Bloomberg.
While the reported profit before tax declined 19.3 percent to Rs 2,938 crore, after considering the impact of the one-offs, the adjusted profit before tax grew 14 percent to Rs 2,938 crore.
Income from operations rose 9.9 percent to Rs 8,453.4 crore.
Asset Quality Performance
Provisions spiked 26.5 percent from last quarter but fell 72.8 percent to Rs 148 crore compared to the year-ago period. The lender attributed the sequential spike in provisions to composition of the loan book, with substantial growth in the non-individual book, which requires higher standard asset provisioning than the individual loan book. Provisions for the year stood at Rs 3,067 crore, of which Rs 738 crore is on account of non-performing loans.
The mortgage lender was required to make provisions of Rs 2,396 crore of which Rs 1,605 crore was for standard assets, as per guidelines of the National Housing Bank, a a wholly owned subsidiary of the Reserve Bank of India.
Gross non-performing assets in absolute terms stood at Rs 2,378 crore. In percentage terms, gross NPAs stood at 0.79 percent of the total loan book.
Non-performing loans of the individual portfolio was 0.61 percent while that of the non-individual portfolio stood at 1.16 percent. While individual portfolio declined 4 basis points, non-individual portfolio remained unchanged on a sequential basis.
Other Key Highlights
- Net interest margins remained unchanged at 4.1 percent on a year-on-year basis.
- Spread on loans rose to 2.33 percent compared to 2.46 percent sequentially and 2.29 percent last year.
- Total loan book stood at Rs 2,86,876 crore, rising 16 percent over the corresponding quarter last year, and in line with recent trends for the company.
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