Economy

HDFC sounds caution on economy, Q4 net jumps

Read more at www.thehindu.com

Mortgage lender Housing Development Finance Corporation Ltd. (HDFC) reported standalone net profit for the fourth quarter surged 42% to ₹3,180 crore.

However, it sounded a note of caution considering the second wave of COVID-19 gripping the country.

“Since April, India has been witnessing an eruption of a second wave of infections,” HDFC said in a filing.

“There continues to be a great deal of uncertainty on the duration and intensity of the second wave and the resultant impact it may have on the Corporation and the overall economy.”

For the fiscal ended March 31, it reported a net profit of ₹12,027 crore compared with ₹17,770 crore in the previous fiscal. However, the profit numbers were not comparable on account of one-time gains in FY20.

Total comprehensive income for the year ended March 31 stood at ₹ 13,762 crore, it said.

The board has recommended a dividend of ₹23 per equity share.

HDFC said demand for home loans remained robust owing to low interest rates, softer property prices, concessional stamp duty rates in certain States and fiscal incentives. During the fourth quarter, individual loan disbursements rose 60% year-on-year, it added.

March witnessed the highest levels in terms of individual receipts, approvals and disbursements.

The average size of individual loans disbursed during the year stood at ₹ 29.5 lakh compared with ₹ 27 lakh in the previous year. There was an uptick in the average ticket size during the quarter ended March 31 to ₹ 31.4 lakh, attributable to the demand for higher end properties, especially in the metro cities, it said.

As per regulatory norms, the gross non-performing loans as at March 31 stood at ₹9,759 crore. This is equivalent to 1.98% of the loan portfolio.

The non-performing loans of the individual portfolio stood at 0.99% while that of the non-individual portfolio stood at 4.77%.

HDFC said it is required to carry a total provision of ₹5,491 crore.

But its provisions as at March 31 stood at ₹13,025 crore. “The provisions carried as a percentage of the Exposure at Default (EAD) is equivalent to 2.62%.”

HDFC said its pure NII for the year ended March 31 stood at ₹15,172 crore compared witho ₹12,904 crore in the previous year, up 18%.

Its capital adequacy ratio stood at 22.2%, of which Tier I capital was 21.5% and Tier II capital was 0.7%. As per the regulatory norms, the minimum requirement for the capital adequacy ratio and Tier I capital is 14% and 10% respectively.

For the quarter ended ended March 31, the consolidated profit after tax stood at ₹5,669 crore compared with ₹4,342 crore in the corresponding quarter of the previous year, up 31%.

HDFC said as at March 31, ₹4,479 crore loans were being restructured under the RBI’s Resolution Framework for COVID-19 related stress. This was 0.8% of AUM. Of the loans being restructured, 27% were individual loans and 73% non-individual loans.

Cumulative COVID-19 provision as at March 31 stood at ₹ 844 crore, it said.

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