Mortgage financier HDFC reported 54% growth in net profit to ₹2,190 crore for the quarter ended June 30 on the back of 25% growth in individual loans.
HDFC said, as per directions of Ministry of Corporate Affairs, the lender had adopted Companies (Indian Accounting Standards) Rules, 2015 (Ind AS) with effect from April 1, 2018.
“Interest income on NPAs which was not accrued earlier is now recognised as part of Ind AS adjustment, if the security is adequate and the present value of realisation of the security is greater than the outstanding loan dues,” HDFC said.
“Reported profit growth is aided by advance receipt of dividend from HDFC Bank (last year in Q2) and income earned on recent capital raise,” said CLSA India in a note to it’s clients. While the growth in the total loan book was 18%, individual loan disbursement grew 17% with the average size of such loans standing at ₹26.7 lakh, according to HDFC.
Net interest income rises
Net interest income for the quarter stood at ₹2,890 crore, up 20% from ₹2,412 crore in the year-earlier period. The spread on loans over the cost of borrowings for the quarter was 2.28%.
The spread on the individual loan book was 1.91% while on the non-individual book it was 3.14%.