HDFC net profit soars almost four times to Rs 8,372.5 cr on gains from Gruh Finance merger; loan book crosses Rs 5 lakh cr

  • The company said the massive gain in bottomline is notional but mandatory from an accounting perspective, as it is based on the valuation gain on its 9.9 percent stake in Bandhan Bank following the merger of subsidiary Gruh Finance with the Kolkata-based lender effective last October

  • It can be noted that in October, HDFC had allotted 9.90 percent of its subsidiary Gruh Finance to Bandhan Bank, the value of which is pegged at Rs 9,020 crore at the end of the reporting quarter

  • For the first time, the loan book crossed Rs 5 lakh crore during the quarter, vice chairman and chief executive Keki Mistry said

Mumbai: The largest pureplay mortgage lender HDFC on Monday reported a near four-fold growth in net profit at Rs 8,372.5 crore for the three months to December as against Rs 2,113.8 crore in the same period last fiscal year.

The company said the massive gain in bottomline is notional but mandatory from an accounting perspective, as it is based on the valuation gain on its 9.9 percent stake in Bandhan Bank following the merger of subsidiary Gruh Finance with the Kolkata-based lender effective last October.

It can be noted that in October, HDFC had allotted 9.90 percent of its subsidiary Gruh Finance to Bandhan Bank, the value of which is pegged at Rs 9,020 crore at the end of the reporting quarter.

The reported profit-before-tax for the quarter ended December 31, 2019 stood at Rs 9,143 crore compared to Rs 2,869 crore in the previous year and after providing for tax of Rs 771 crore, profit after tax is Rs 8,372.5 crore compared to Rs 2,113.8 crore, the company explained.

For the first time, the loan book crossed Rs 5 lakh crore during the quarter, vice chairman and chief executive Keki Mistry told reporters here this evening.

The company booked a 24 percent growth in individual loans, after adding back loans sold in the preceding 12 months, while excluding that the same clipped at 16 percent.  

On an AUM basis, growth in the individual loan book was 16 percent while total loan book grew 14 percent.

 HDFC net profit soars almost four times to Rs 8,372.5 cr on gains from Gruh Finance merger; loan book crosses Rs 5 lakh cr

HDFC Chairperson Deepak Parekh. PTI image.

Net interest margin, which is the key profit metric, remained flat at 3.3 percent during the reporting quarter as in the past two quarters, and the same from individual loans stood 1.97 percent. The spreads stood at 2.27 percent.

Despite a negative market and the rising gloom on the overall economy, gross non-performing loans stood at Rs 5,950 crore or 1.36 percent, while NPAs on the individual portfolio stood at 0.75 percent, up 2 bps from Q2 and that of the non-individual portfolio at 2.91 percent, Mistry said.

HDFC's capital adequacy ratio stood at higher 18.6 percent, of which tier I was 17.3 percent and tier II was 1.3 percent as against the regulatory requirement of 13 percent.

As of December 2019, individual loans comprised 76 percent of the loan book, while if looked from a nine months perspective, the same accounted for 90 percent of the incremental loan growth taking the total outstanding individual loans to Rs 63,679 crore.

The corporation on average has been approving 9,400 affordable housing loans on a monthly basis, with monthly such average approvals at Rs 1,500 crore. Total individual loan approvals grew 15 percent and disbursements grew by 13 percent. The average size of individual loans has come down to Rs 26.9 lakh from over Rs 27.2 lakh.

As against the mandated provision of Rs 3,624 crore, the company made a provision of Rs 9,934 crore or 2.25 percent of total loans.

The HDFC counter closed 2.25 percent down at Rs 2395.80 on the BSE whose benchmark Sensex plunged by a whopping 1.1 percent.

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Updated Date: Jan 28, 2020 13:59:25 IST