- 17% growth in the overall loan book on an Assets Under Management (AUM) basis as at September 30, 2018
- 25% growth in individual loans (after adding back loans sold in the preceding 12 months)
- Reduction in non-performing loans to 1.13% as at September 30, 2018 compared to 1.18% as at June 30, 2018
- 18% growth in Net Interest Income for the half-year ended September 30, 2018
- Spreads at 2.28%
- Profit After Tax for the quarter ended September 30, 2018 stood at Rs. 2,467 crore – a growth of 25%
FINANCIAL RESULTS
Financials for the half-year ended September 30, 2018
The reported profit before tax for the half-year ended September 30, 2018 stood at Rs. 6,559 crore compared to Rs. 4,737 crore in the corresponding period of the previous year, representing a growth of 38%
In August 2018, the Corporation received Rs. 891 crore from the initial public offer of HDFC Asset Management Company Limited.
After providing for tax of Rs. 1,902 crore ( previous year Rs. 1,334 crore), the reported profit after tax before other comprehensive income for the half-year ended September 30, 2018 stood at Rs. 4,657 crore compared to Rs. 3,403 crore in the corresponding period of the previous year, representing a growth of 37%.
Financials for the quarter ended September 30, 2018
The reported profit before tax for the quarter ended September 30, 2018 stood at Rs. 3,489 crore compared to Rs. 2,715 crore in the corresponding quarter of the previous year, representing a growth of 29%.
After providing for tax of Rs. 1,022 crore (previous year Rs. 737 crore), the reported profit after tax before other comprehensive income for the quarter ended September 30, 2018 stood at Rs. 2,467 crore compared to Rs. 1,978 crore in the corresponding quarter of the previous year, representing an increase of 25%.
LENDING OPERATIONS
In support of the government’s flagship scheme, ‘Housing For All’, the Corporation continued its efforts towards loans to the Economically Weaker Section (EWS) and Low Income Group (LIG).
During the half-year ended September 30, 2018, 37% of home loans approved in volume terms and 18% in value terms have been to customers from the EWS and LIG segment.
The Corporation on an average has been approving 8,300 loans on a monthly basis to the EWS and LIG segment, with monthly such average approvals at approximately Rs. 1,354 crore.
The average home loan to the EWS and LIG segment stood at Rs. 10.1 lac and Rs. 17.6 lac respectively.
Overall Lending Operations
Total individual loan disbursements grew by 17%. The average size of individual loans stood at Rs. 27 lac.
On an Assets under Management (AUM) basis, the growth in the individual loan book was 18% and the non-individual loan book grew by 13%. The growth in the total loan book was 17%.
As at September 30, 2018, individual loans comprise 73% of the AUM.
As at September 30, 2018, the loan book stood at Rs. 3,79,091 crore as against Rs. 3,24,269 crore in the previous year.
During the quarter ended September 30, 2108, the Corporation sold individual loans amounting to Rs. 6,059 crore (PY: Rs. 3,531 crore). All the loans assigned during the quarter were to HDFC Bank pursuant to the buyback option embedded in the home loan arrangement between the Corporation and HDFC Bank.
Total loans sold during the preceding twelve months was Rs. 15,773 crore as against Rs. 15,433 crore in the corresponding period of the previous year.
As at September 30, 2018, the outstanding amount in respect of individual loans sold was Rs. 50,414 crore. HDFC continues to service these loans.
The growth in the individual loan book, after adding back loans sold in the preceding 12 months was 25% (18% net of loans sold). The non-individual loan book grew at 14%. The growth in the total loan book after adding back loans sold was 22% (17% net of loans sold).
Non-Performing Assets (NPAs)
As per National Housing Bank (NHB) norms, the gross non-performing loans as at September 30, 2018 stood at Rs. 4,278 crore. This is equivalent to 1.13% of the loan portfolio (as against 1.18% as at June 30, 2018). The non-performing loans of the individual portfolio stood at 0.66% while that of the non-individual portfolio stood at 2.18%.
As per NHB norms, the Corporation is required to carry a total provision of Rs. 2,951 crore.
As against this, the balance in the Provisions and Loan Losses Account as at September 30, 2018 stood at Rs. 5,071 crore. This is equivalent to 1.33% of the loan portfolio.
In terms of Ind AS, the Corporation’s assets have to be classified as follows:
- Stage 1: Outstanding up to 30 days;
- Stage 2: Outstanding greater than 30 days, but less than 90 days;
- Stage 3: Non-performing Assets – Outstanding for greater than 90 days.
Net Interest Income
The net interest income (without considering income from loans sold) for the half-year ended September 30, 2018 stood at Rs. 5,343 crore compared to Rs. 4,511 crore in the corresponding period of the previous year, representing a growth of 18%.
For the quarter ended September 30, 2018 the net interest income (without considering income from loans sold) stood at Rs. 2,594 crore compared to Rs. 2,236 crore in the corresponding quarter of the previous year, representing a growth of 16%.
Spread and Margin
The spread on loans over the cost of borrowings for the half-year ended September 30, 2018 stood at 2.28%. The spread on the individual loan book was 1.91% and on the non-individual book was 3.11%.
Net Interest Margin (including the upfronting of income on account of loans sold as per Ind AS) stood at 3.5% as compared to 3.4% in the previous year.
INVESTMENTS
As at September 30, 2018, the unaccounted gains on listed investments in subsidiary and associate companies amounted to Rs. 1,69,744 crore.
COST INCOME RATIO
For the half-year ended September 30, 2018, the cost to income ratio stood at 9.0%.
CONVERSION OF WARRANTS
In October 2015, the Corporation had issued 3.65 crore of Warrants at a price of Rs. 14 per Warrant. The Warrant holder had the right to exchange each Warrant on or before October 5, 2018 at a Warrant Exercise Price of Rs. 1,475 per equity share. 99.998% of the Warrants got converted. The Corporation received a total amount of Rs. 5,384 crore on conversion of the Warrants.
CAPITAL ADEQUACY RATIO
The Corporation’s capital adequacy ratio stood at 18.4%, of which Tier I capital was 17.1% and Tier II capital was 1.3%. As per the regulatory norms, the minimum requirement for the capital adequacy ratio and Tier I capital is 12% and 6% respectively.
DISTRIBUTION NETWORK
HDFC’s distribution network spans 514 outlets which include 169 offices of HDFC’s distribution company, HDFC Sales Private Limited (HSPL). HDFC covers additional 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 third party direct selling associates.
To cater to non-resident Indians, HDFC has offices in London, Dubai and Singapore and service associates in the Middle East.
