The Board of Directors of Housing Development Finance Corporation Limited (HDFC) approved the thirtieth annual accounts of the Corporation for the year ended March 31, 2007 at its meeting held on Wednesday, May 3, 2007 in Mumbai.
Profit before tax for the year ended March 31, 2007 amounted to Rs. 1,967.78 crores as compared with Rs. 1,557.30 crores for the previous year - an increase of 26%. After providing Rs. 397.40 crores for tax (previous year Rs. 300 crores), the profit after tax increased by 25% to Rs. 1,570.38 as compared to Rs. 1,257.30 crores in the previous year.
The Board of Directors recommend payment of dividend for the year ended March 31, 2007 of Rs. 22 per share as against Rs. 20 per share in the previous year.
The Return on Equity increased to 31.3% in the current year from 30.1% in the previous year.
During the year, total assets of the Corporation increased to Rs. 62,744 crores compared with Rs. 51,190 crores in the previous year, an increase of 23%.
Housing Loan Portfolio
The loan portfolio (including loans outstanding, deposits and investments in preference shares and debentures for financing real estate related projects) as at March 31, 2007 amounted to Rs. 57,988 crores as against Rs. 46,492 crores in the previous year – an increase of 25%.
The spread on loans over the cost of borrowings for the year stood at 2.18% as against 2.16% in the previous year.
The unrealised gains on HDFC's listed investments amounted to Rs. 6,948 crores (previous year Rs. 5,973 crores). This excludes the appreciation in the value of the unlisted investments.
Approvals and Disbursements
Loan approvals during the year were Rs. 33,332 crores as compared to Rs. 25,634 crores in the previous year, representing a growth of 30%. Loan disbursements during the year were Rs. 26,178 crores as against Rs. 20,679 crores in the previous year, representing a growth of 27%.
Cumulative loan approvals and disbursements as of March 31, 2007 were Rs. 1,45,764 crores and Rs. 1,19,281 crores respectively.
With effect from March 31, 2005, National Housing Bank (NHB) has revised the norms for recognising non-performing assets (NPA) wherein NPAs are recognised on the basis of 90 days overdue compared to the earlier norm of six months past due.
Gross non-performing loans defined as loans where the instalments are outstanding for more than 90 days as at March 31, 2007 amounted to Rs. 533.82 crores. This is equivalent to 0.92% of the portfolio (previous year – 0.96%) comprising loans as well as debentures issued by corporates and corporate deposits placed for financing their real estate projects.
NHB has introduced a general provisioning of 0.4% on outstanding standard non-housing loans to be implemented in a phased manner. As at March 31, 2007, a general provisioning of 0.1% is to be made and is to be scaled up by 0.1% each, over the next three quarters. The Corporation, however, has made the entire additional provisioning of 0.4% in the year under review.
In terms of the prudential norms as stipulated by NHB, the Corporation is required to carry a provision of Rs. 151.29 crores in respect of non-performing assets and a general provision on outstanding standard non-housing loans.
Based on a six months overdue basis, the non-performing loans as at March 31, 2007 stood at 0.77% of the loan portfolio as against 0.79% in the previous year.
The balance in the provision for contingencies account as at March 31, 2007 stood at Rs. 409.66 crores, which is equivalent to 0.71% of the portfolio.
CAPITAL ADEQUACY RATIO:
HDFC's capital adequacy ratio stood at 12.9% of the risk weighted assets, as against the minimum requirement of 12%. Tier 1 capital adequacy was 7.6% against a minimum requirement of 6%.
REVIEW OF KEY SUBSIDIARY AND ASSOCIATE COMPANIES :
HDFC Standard Life Insurance Company Limited (HDFC-SL)
Gross premium income for the year ended March 31, 2007 was Rs. 2,856 crores as compared to Rs. 1,570 crores in the previous year – a growth of 82%. The cumulative sum assured in respect of policies issued increased to Rs. 67,193 crores from Rs. 47,730 crores last year.
The directors of HDFC-SL have declared the company's fifth bonus for its participating "with profits" policy holders.
The company has a portfolio of 21 retail products and 6 group products covering saving, investment, protection and retirement needs of the customers, along with five optional rider benefits.
HDFC-SL covers over 693 cities and towns in India through its offices in the country with over 79,000 financial consultants appointed by the company. HDFC-SL also has 833 corporate agents and other sales intermediaries including banks for distribution of insurance products.
HDFC Asset Management Company Limited (HDFC-AMC)
The total assets under management as at March 31, 2007 stood at Rs. 36,421 crores, which is inclusive of Rs. 8,063 crores of assets under discretionary portfolio management/advisory services, as compared to Rs. 26,426 crores in the previous year. The number of investor accounts increased to over 21 lacs as at March 31, 2007 as compared to 14 lacs in the previous year.
For the year ended March 31, 2007, HDFC-AMC reported a profit after tax of Rs. 67.54 crores as against Rs. 45.48 crores in the previous year, representing a growth of 49%. During the year, an interim dividend of 60% was paid in March 2007 and a final dividend of 40% was recommended, making a total dividend of 100% as against 70% in the previous year.
HDFC Chubb General Insurance Company Limited (HDFC-CHUBB)
HDFC-CHUBB offers motor insurance, commercial insurance, home insurance, group and retail accident and travel insurance and specialty insurance products. Gross Written Premium for the year stood at Rs. 197 crores and profit after tax for the year ended March 31, 2007 stood at Rs. 2 crores.
Intelenet Global Services Private Limited (Intelenet)
Intelenet provides Business Process Outsourcing (BPO) services for organisations based in international markets. HDFC and Barclays Bank plc. each hold 50% in the venture.
For the year ended March 31, 2007, total revenue was Rs. 382.88 crores as against Rs. 271.53 crores in the previous year. EBIDTA stood at Rs. 54.39 crores.
HDFC's distribution network spans 234 outlets which include 43 offices of HDFC's distribution company, Home Loan Services India Private Limited (HLSIL). In addition, HDFC covers over 90 locations through its outreach programmes. Third party channels form an integral part of the distribution network with home loans being distributed through HLSIL, HDFC Bank Limited and other third party Direct Selling Agents (DSA).
To cater to non-resident Indians, HDFC has an office in London and Dubai and service associates in Kuwait, Oman, Qatar, Sharjah, Abu Dhabi, Al Khobar, Jeddah and Riyadh in Saudi Arabia.
To view the financial results and balance sheet please click on the links below: