HDFC Ltd. has reported a net profit of Rs 9.81bn for the fiscal third quarter ended December 31, 2011 compared to Rs 8.91bn in the same quarter a year earlier.
Revenues for the reporting quarter stood at Rs 43.79bn compared with Rs 31.49bn in the corresponding quarter of the last fiscal year.
Total income for the reporting quarter (October-December 2011-12) was at Rs 44.72bn versus Rs 33.21bn in the quarter ended December 31, 2010.
NIMs for Q3 FY12 were at 4.3% while the outstanding loan book was up 21% in the fiscal third quarter.
Profit on the sale of investments stood at Rs 879.9mn in Q3 FY12 versus Rs 1.67bn in the year-ago period.
Q3 FY12 spreads stood at 2.27%. Net interest income for Q3 FY12 were up 18% at Rs 13.67bn.
Operating profit was up 19% at Rs 12.4bn versus Rs 10.46bn in the same quarter last year. The capital adequacy ratio stood at 13.9% at the end of Q3 FY12.
Lending Operations
Loan approvals and disbursements for the nine months ended December 31, 2011 grew by 19% each compared to the corresponding period in the previous year.
As at December 31, 2011, the loan book stood at Rs1,32,208 crore as against Rs1,09,051 crore as at December 31, 2010. Individual loans sold during the preceding twelve months amounted to Rs4,221 crore. The growth in the individual loan book, inclusive of loans sold is 26% (20% net of loans sold). The growth in the total loan book inclusive of loans sold is 25% (21% net of loans sold).
As at December 31, 2011, the total loans outstanding in respect of loans sold stood at ` 13,484 crores. HDFC continues to service the loans sold under these transactions and is entitled to the residual interest on the loans sold. The residual interest on the individual loans sold is 1.55% p.a. and is accounted over the life of the loans.
Spreads and Net Interest Margins
The spread on loans over the cost of borrowings for the nine-month period ended December 31, 2011 stood at 2.27%. Net Interest Margins for the nine-month period ended December 31, 2011 was 4.3%
Investments
As at December 31, 2011, the unrealised gains on HDFC’s listed investments amounted to Rs19,139 crores. This excludes the appreciation in the value of unlisted investments.
Non-Performing Loans
Despite the challenging environment, this is the twenty-eighth consecutive quarter end at which the percentage of non-performing loans has been lower than the corresponding quarter in the previous year.
Gross non-performing loans as at December 31, 2011 amounted to Rs1,109 crore. This is equivalent to 0.82% of the loan portfolio (previous year – 0.85%).
In terms of the prudential norms as stipulated by the National Housing Bank, the Corporation is required to carry a provision of Rs1,229 crore, which includes the provisioning of Rs440 crore on standard assets in respect of housing loans granted under the Dual Rate Home Loan Scheme.
The balance in the provision for contingencies account as at December 31, 2011 stood at Rs1,584 crore, which is equivalent to 1.17% of the portfolio.
CAPITAL ADEQUACY RATIO
HDFC’s capital adequacy ratio stood at 13.9% of the risk weighted assets, as against the minimum requirement of 12%. Tier 1 capital adequacy was 11.9% as against a minimum requirement of 6%.
DISTRIBUTION NETWORK
HDFC’s distribution network spans 304 outlets, which include 74 offices of HDFC’s distribution company, HDFC Sales Private Limited (HSPL). In addition, HDFC covers over 90 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 offices in London, Dubai and Singapore and service associates in Kuwait, Oman, Qatar, Sharjah, Abu Dhabi and Saudi Arabia – Al Khobar, Jeddah and Riyadh.