Housing Development Finance Corporation Ltd. (HDFC) reported third- quarter net profit rose 11% to ₹3,261 crore from ₹2,926 crore in the year-earlier period on higher core income.
However, there was an increase in non-performing loans (NPLs), the lender said. “The demand for home loans and pipeline of loan applications continues to remain strong,” said vice-chairman and CEO Keki Mistry. “Growth in home loans was seen in the affordable housing segment and in high-end properties as well,” he said.
“The increasing sales momentum and new project launches augurs well for the housing sector,” Mr. Mistry added.
As on December 31, 2021, assets under management (AUM) stood at ₹6,18,917 crore as against ₹5,52,167 crore in the previous year.
The outstanding amount in respect of individual loans sold was ₹79,748 crore. HDFC said it continued to service these loans. The growth in the individual loan book, after adding back loans sold in the preceding 12 months was 24%. The growth in the total loan book after adding back loans sold was 17%, the lender said.
The collection efficiency for individual loans on a cumulative basis witnessed an improvement to stand at an average of 98.9% during the quarter, HDFC said.
The gross non-performing loans (NPLs) as on December 31, 2021, stood at ₹12,419 crore.
This was equivalent to 2.32% of the portfolio. Out of the total reported gross NPLs of ₹12,419 crore, ₹2,746 crore comprised loans which were less than 90 days. Hence, as against the reported NPL, the NPLs net of loans that are less than 90 days past due as at December 31, 2021 is – individuals: 1.14%, non-individuals: 3.87% and total portfolio: 1.81%, it said.
As per the revised regulatory norms, HDFC is required to carry a total provision of ₹ 7,450 crore.
The actual provisions as on December 31, 2021 stood at ₹ 13,195 crore. The provisions carried as a percentage of the Exposure at Default (EAD) is equivalent to 2.45%, the lender said. “While there has been an increase in the reported NPLs, there has been no financial impact and credit costs have reduced,” HDFC said in a filing.
The Net Interest Income (NII) for the quarter stood at ₹4,284 crore compared with ₹4,005 crore a year earlier. The reported Net Interest Margin (NIM) was 3.6%. As on December 31, 2021, the capital adequacy ratio stood at 22.4%, of which Tier I capital was 21.7% and Tier II capital was 0.7%. For the quarter, the consolidated profit after tax attributable to HDFC stood at ₹5,837 crore compared with ₹5,177 crore a year earlier. As on December 31, 2021, loans restructured under the RBI’s Resolution Framework for COVID-19 Related Stress (OTR 1.0 & 2.0) was equivalent to 1.34% of the loan book.
“Of the loans restructured, 64% are individual loans and 36% are non-individual loans. Of the total restructured loans, 34% is in respect of just one account,” Mr. Mistry said.
In January 2022, further recovery has been made in respect of this one account and post this, the restructured book stands at 1.21% of the loan book. As on December 31, 2021, loans approved under the Emergency Credit Line Guarantee Scheme stood at ₹ 2,215 crore of which, 74% has been disbursed. The cumulative COVID-19 provision as on December 31, 2021, stood at ₹1,187 crore, which was 9% of total provisions held.