HDFC Q3 PAT up 10% on lower investment income

India's largest housing finance major Housing Development Finance Corporation 's (HDFC) net profit grew at a slower pace of 10% year-on-year to Rs 891 crore in the third (October-December) quarter on the back of lower investment income and higher interest cost. However, total income rose up 35% to Rs 4,473 crore from 3,321 crore a year back.

The performance is slightly below the market expectation. A CNBC TV18 estimate showed 13% rise in net profit.

The loan book expanded more than 21% Yo-Y to Rs 1.32 lakh crore while the net interest income (NII) or the difference between interests earned and paid out rose 18% to Rs 1,367 crore. During the quarter interest and other charges shot up 51% y-o-y to Rs 3,012. However, net interest margin (NIM) almost remained unchanged at 4.3%.
Profit on sale of investments fell from Rs 167 crore in Q3, FY11 to Rs 88 crore, a drop of 47%. The mortgage lender's third profit before sale of investment however rose nearly 19% Y-o-Y to Rs 1,240 crore.

"Profit from sale of investments does not happen similar way quarter after quarter. Our loan approvals have grown at 19% Y-o-Y in Q3. We have seen consecutive declines in non-performing liabilities for 28 quarters (7 years) in a row," said HDFC's vice-chairman and CEO, Keki Mistry while addressing the electronic media.

Gross non-performing loans, according to a company release, stood at 1,109 crore or 0.82% of the loan book as against 0.85% in the same quarter previous year.

HDFC's total provision for contingencies account stood at Rs 1,584 crore as on December 31, 2011; as against Rs 1,229 crore mandated by the National Housing Bank (NHB), the regulator for housing finance companies (HFCs).

Moreover, total provision is inclusive of Rs 440 crore made on account of NHB's new norms on standard assets. The NHB earlier directed all HFCs to provide for 0.4% of the total outstanding standard loans. It was earlier 0.25%.

Standard asset, according to NHB, means the asset in respect of which, no default in repayment of principal or payment of interest is perceived and which does not disclose any problem nor carry more than normal risk attached to the business.


Source: www.moneycontrol.com

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Gaurav Agarwal
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