Performance Highlights
- Standalone profit after tax at Rs. 4,486 crore for the nine months ended December 31, 2015
- 23% growth in the individual loan book (after adding back the loans sold in the preceding 12 months)
- Spread on loans at 2.31% for the nine months ended December 31, 2015 – maintained at the same level as the corresponding period last year
- Gross non-performing loans at 0.72% of the loan portfolio as at December 31, 2015
- Consolidated profit after tax at Rs. 6,730 crore for the nine months ended December 31, 2015
The Board of Directors of Housing Development Finance Corporation Limited (HDFC) announced its unaudited standalone financial results for the third quarter of the financial year 2015-16, following its meeting on Wednesday, January 27, 2016 in Mumbai. The accounts have been subjected to a limited review by the Corporation’s statutory auditors in line with the regulatory guidelines.
STANDALONE FINANCIAL RESULTS
Financials for the nine months ended December 31, 2015 For the nine months ended December 31, 2015, the profit before tax stood at Rs. 6,466 crore as compared to Rs. 5,971 crore in the corresponding period of the previous year.
After providing Rs. 1,980 crore for tax, (inclusive of Rs. 266 crore as deferred tax liability on Special Reserve), the profit after tax for the nine months ended December 31, 2015 stood at Rs. 4,486 crore as compared to Rs. 4,128 crore in the corresponding period previous year, representing growth of 9%.
Profit growth was impacted by lower profit on sale of investments, lower income from leased properties and other income and higher depreciation in the current year as compared to the previous year.
Financials for the quarter ended December 31, 2015 For the quarter ended December 31, 2015, the profit before tax stood at Rs. 2,191 crore as compared to Rs. 2,064 crore in the corresponding quarter of the previous year.
After providing Rs. 670 crore for tax, (inclusive of Rs. 94 crore as deferred tax liability on Special Reserve), the profit after tax for the quarter ended December 31, 2015 stood at Rs. 1,521 crore as compared to Rs. 1,425 crore in the corresponding period previous year, representing growth of 7%.
The lower growth in the profit for the quarter ended December 31, 2015 is due to lower non-core income i.e. profit on sale of investments was Rs. 57 crore (PY Rs. 113 core) and income from leased properties was Rs. 1 crore (PY Rs 17 crore).
Growth in the non-individual loan portfolio has picked up, recording a net increase of Rs. 1,987 crore for the quarter ended December 31, 2015. Accordingly, the Corporation made higher provisioning, mainly on account of standard assets at Rs. 68 crore (PY Rs. 45 crore). Also, owing to lower interest rates, the Corporation earned lower interest on shareholders’ funds, impacting profitability. If adjusted for these factors, the profit growth for the quarter would have been approximately 15%.
TOTAL ASSETS As at December 31, 2015 the total assets of HDFC stood at Rs. 2,76,163 crore as against Rs. 2,45,881 crore as at December 31, 2014 – an increase of 12%.
LENDING OPERATIONS As at December 31, 2015, the loan book stood at Rs. 2,48,097 crore as against Rs. 2,19,939 crore as at December 31, 2014. Loans sold in the preceding twelve months amounted to Rs. 12,975 crore. After adding back loans sold in the preceding 12 months, the growth in individual loan portfolio is 23%. The growth in the non-individual loan portfolio stood at 10%. The growth in the total loan book, after adding back the loans sold in the preceding 12 months is 19%.
Of the total loan book on an Assets Under Management (AUM) basis, individual loans comprise 73%. The average size of the individual loans stood at Rs. 25 lac. On an AUM basis, in the nine months ended December 31, 2015, 93% of the incremental growth in the loan book came from individual loans.
As at December 31, 2015, the total loans outstanding in respect of loans sold/assigned stood at Rs. 28,987 crore. HDFC continues to service these loans and is entitled to the residual interest on the loans sold. The residual interest on the individual loans sold is 1.21% p.a. and is being accounted over the life of the loans and not on an upfront basis.
Non-Performing Loans Gross non-performing loans as at December 31, 2015 amounted to Rs. 1,794 crore. This is equivalent to 0.72% of the loan portfolio. The non-performing loans of the individual portfolio stood at 0.54% while that of the non-individual portfolio stood at 1.12%.
As per the National Housing Bank norms, the Corporation is required to carry a total provision of Rs. 1,865 crore.
The balance in the provision for contingencies account as at December 31, 2015 stood at Rs. 2,186 crore of which Rs. 532 crore is on account of non-performing loans and the balance Rs. 1,654 crore is in respect of general provisioning on standard loans and other provisions. This balance in the provision for contingencies is equivalent to 0.88% of the portfolio. The Corporation carries an additional provision of RS. 321 crore over the regulatory requirements.
Spread and Net Interest Margins The spread on loans over the cost of borrowings for the nine months ended December 31, 2015 stood at 2.31%, the same as in the corresponding period of the previous year. The spread on the individual loan book was 1.97% and on the non-individual book was 3.09%.
Net Interest Margin for the nine months ended December 31, 2015 was 3.85%.
INVESTMENTS As at December 31, 2015, the unrealised gains on HDFC’s listed investments amounted to Rs. 59,091 crore (previous year – Rs. 51,996 crore). This excludes the appreciation in the value of unlisted investments.
CAPITAL ADEQUACY RATIO The Corporation’s capital adequacy ratio stood at 17.7%, of which Tier I capital was 14.2% and Tier II capital was 3.5%. Deferred Tax Liability on Special Reserve and the investment in HDFC Bank has also been considered as a deduction in the computation of Tier I and Tier II capital. As per regulatory norms, the minimum requirement for the Capital Adequacy Ratio and Tier I capital is 12% and 6% respectively.
DISTRIBUTION NETWORK HDFC’s distribution network spans 396 outlets, which include 114 offices of HDFC’s distribution company, HDFC Sales Private Limited (HSPL). In addition, HDFC covers additional locations through its outreach programmes. Distribution channels form an integral part of the distribution network with home loans being distributed through HSPL, HDFC Bank Limited and other third party selling associates.
To cater to non-resident Indians, HDFC has representative offices in London, Dubai and Singapore and service associates in Kuwait, Oman, Qatar, Abu Dhabi and Saudi Arabia.
CONSOLIDATED RESULTS For the nine months ended December 31, 2015, the consolidated profit after tax stood at Rs. 6,730 crore as compared to Rs. 6,116 crore in the corresponding period last year.
The share of profit from subsidiary and associate companies in the consolidated profit after tax stood at 33% for the nine months ended December 31, 2015.
To View the PDF, Please Click on the Links Below Quarterly Results (Consolidated) - for quarter/nine months ended in December 31, 2015 Quarterly Results (Standalone) - for quarter/nine months ended in December 31, 2015 
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