Housing Development Finance Corporation (HDFC) on Wednesday reported a profit of R1,277 crore for the quarter ended December 31, up 12% year-on-year (y-o-y). Before dividend, the company’s sale of investments and tax stood at R1,646.78 crore, up 17% from a year ago. As at December 31, the total assets of HDFC stood at R2,18,286 crore, an increase of 19% from the previous year. Total income for the quarter stood at R6,020 crore, up 14.8% y-o-y. HDFC’s asset quality situation improved, with net non-performing assets (NPAs), as a ratio of total assets, coming in at 0.77%, down 2 bps sequentially. “Historically, we have seen that the NPA number changes by 1-2 bps on a quarter-on-quarter (q-o-q) basis. So we hope that will continue,” said Keki Mistry, vice chairman and chief executive officer, HDFC.
Spreads during the quarter rose 8 bps sequentially and stood at 2.28%. Since bank base rates during the third quarter were steady to a large extent, the spreads went up, said Mistry.
During the October-December period, the loan book rose 19.4% y-o-y to R92,266 crore. Loans sold in the preceding 12 months amounted to R3,263 crore, HDFC said in a statement. The growth in the individual loan book after adding back loans sold is 27%, while the total loan book grew 21%, inclusive of all loans sold. 89% of the incremental growth in loan book, during the nine months ended December 31, came from the individual loan book.
“Demand is coming from top five centers including Delhi NCR, Chennai, Mumbai, Bangalore and Pune. But then it is not just the main cities, but the nearby Tier II and III cities which are adding to the growth,” Mistry told FE. Banks are known to have upped their game in the home loan market, as corporate credit growth has slowed down significantly in a difficult business environment. Analysts predict that renewed impetus on retail credit and the increased participation of banks, may result in erosion of market share for HDFC. “The market is fairly large and there is enough potential for more players to come in. We have to face competition, but we have been doing it for a very long time already," Mistry said.