HDFC Reports a 22 Percent Drop In Net Over Spike In Bad Loans, Provisioning


Housing Development Finance Corporation (HDFC) on Monday reported a 22% year-on-year (y-o-y) fall in profit to Rs 2,232 crore, because of a spike in bad loans and better provisions. “On the balance sheet level, we are carrying provisions of Rs 10,988 crore, that is way beyond the regulative demand of Rs 4,188 crore,” said Keki Mistry, vice chairman and chief executive officer (CEO), HDFC. The loaner has provided Rs 876 crore within the March quarter on account of Covid-19.

HDFC said that around 26% of its borrowers had opted for a moratorium. “Individual loans beneath moratorium account for 21% of the portfolio,” the company further said.

The reserve bank of India (RBI) on Friday had extended the moratorium for borrowers by 3 months until August 31, 2020. The management acknowledged the impact of Covid-19 on its business.

Mistry added that the year saw very strong demand for housing within the first 11.5 months, but the slowdown within the second half of March because of Covid-19, that is otherwise very busy.

The mortgage loaner saw a spike in bad loans throughout the March quarter. As of March 31, 2020, the gross non-performing assets (NPAs) rose 63 basis points (bps) consecutive and 81 bps y-o-y to 1.99%. HDFC’s gross non-performing loans (NPLs) in value terms stood at Rs 8,908 crore.

The NPLs of the individual portfolio stood at 0.95% whereas that of the non-individual portfolio stood at 4.71%. “As we tend to see normalcy within the system, we expect NPAs to get back to a level that we used to see,” Mistry said on the increase in NPAs.

Total financial gain within the March quarter was up 3.4% at Rs 11,981 crore, compared to a similar quarter last year. the net interest income (NII) within the fourth quarter of 2020 rose 14 July to Rs 3,564 crore, compared to Rs 3,139 crore a year ago.

The net interest margin (NIM) stood at 3.4%, showing an improvement of 10 rates compared to the last quarter. the whole loan book within the March quarter stood at Rs 4.5 lakh crore, up 11 November y-o-y. the whole individual loan approvals were up 14 July in volume terms and 12-tone music in value terms within the March quarter, compared to a similar quarter last year.

For the year over March 31, 2020, the cost-to-income ratio stood at Sep 11, compared to 8.9% a year ago. The HDFC board additionally approved a dividend of Rs 21 per share.

“The dividend financial gain received throughout the quarter was Rs 2 crore compared with Rs 537 crore a year ago,” the corporate said in a release. “While profit on the sale of investment for the quarter stood at Rs 2 crore compared with Rs 321 crore within the same quarter of the previous year,” it further added.

“HDFC’s capital adequacy quantitative relation (CAR) stood at 17.7% of that tier 1 capital was 16.6% and Tier II was 1.1%,” Keki Mistry said.

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