Housing Development Finance Corporation Ltd, or HDFC, the country’s largest mortgage financier, reported a 37% jump in net profit for the first quarter ending June, underscoring a revival in the real estate sector.
The company board also approved the issue of non-convertible debentures worth Rs 35,000 crore on a private placement basis to fund future projects.
Mumbai-based HDFC said its net profit in the April-June quarter grew to Rs 1870.73 crore from Rs 1360.98 crore in the same period last year. It’s provisions for contingencies grew to Rs 340 crore from Rs 50 crore last year; the current provision includes an additional one-time provision of Rs 275 crore, made during the quarter.
HDFC said that individual loan disbursements grew by 18% and the non-individual loan book, including loans to builders and real estate developers, grew at 12% during the quarter. The average size of individual loans stood at Rs 25.3 lakh.
Gross non-performing loans at the end of June 30, 2016 amounted to Rs 2,006 crore, which is 0.75% of the loan portfolio. The bad loans of the individual portfolio stood at 0.59%, while that of the non-individual portfolio stood at 1.11%. Total provision during the quarter was at Rs 1,979 crore of which Rs 1,370 crore is against standard loans and Rs 557 crore towards bad loans.
As of June 30, 2016, the total loan book stands at Rs 2,65 lakh crore, which excludes loans worth Rs 14,011 crore extended during the preceding 12 months. During the quarter, HDFC sold loans amounting to Rs 5,108 crore, of which, Rs 3,296 crore was sold to HDFC Bank and the balance to other banks.
HDFC’s consolidated net profit increased 26.8% to Rs 2,797 crore, from Rs 2,204 crore. Total income rose 18.6% to Rs 13,531 crore, from Rs 11,402 crore.
During the quarter, HDFC concluded the 22.9% stake sale in its general insurance subsidiary HDFC ERGO, to ERGO International AG. As HDFC ERGO is an unlisted entity, the capital gains tax on the sale of shares was Rs 197 crore, resulting in a profit after tax of Rs 725 crore.