Housing Development Finance Corp (HDFC) on Wednesday posted an 11% year-on-year rise in its net profit to Rs 3,261 crore for the quarter ended December 2021. The growth came on the back of a healthy rise in net interest income.
HDFC’s assets under management, at the end of December 2021, stood at Rs 6.19 lakh crore, up 12% on year. Individual loans, that comprise 79% of the non-bank lender’s total AUM, grew 16% on year. “The third wave (of Covid-19) in January 2022 has seen a rise in infections, but with significantly lesser severity. We have had partial disruptions at some locations, but there has not been a material impact on business,” HDFC vice-chairman and CEO Keki Mistry observed in a post earnings call.
The demand for home loans and the pipeline of loan applications continues to remain strong, HDFC said. The growth in home loans was seen in the affordable housing segment as well as in the high-end properties. During Q3FY22, HDFC assigned loans amounting to Rs 7,468 crore to HDFC Bank, higher than the Rs 7,076 crore a year ago. The mortgage lender received 89% of new loan applications during the reporting quarter through digital channels.
The collection efficiency for individual loans, on a cumulative basis, stood at an average of 98.9%. The mortgage major’s net interest income, or the difference between interest earned and expended, rose 7% on year to Rs 4,284 crore in the reporting quarter while the net interest margin was 3.6%. Further, as on December 31, loans restructured under the Reserve Bank of India’s (RBI) one-time restructuring scheme stood at 1.34% of the company’s loan book.
HDFC’s asset quality deteriorated in the reporting quarter after the RBI’s clarification dated November 12 on upgradation of bad loans came into effect. As on December 31, HDFC’s gross NPLs (non-performing loans) stood at Rs 12,419 crore or 2.32% of the non-bank lender’s portfolio, higher than 2% at the end of September. Of the total reported gross NPLs, Rs 2,746 crore comprised loans that are less than 90 days past due as on December 31.
Actual provisions, as at the end of the quarter, stood at Rs 13,195 crore. While there has been an increase in the reported NPLs, there has been no financial impact and credit costs have reduced, HDFC said. HDFC’s capital adequacy ratio stood at 22.4% at the end of December 2021, of which tier I capital was 21.7% and tier II capital was 0.7%.
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