The net profit after tax (PAT) of Housing Development Finance Corporation Limited (HDFC) surged 17.8% year-on-year to ₹4,454 crore in the July to September quarter this year, against ₹3,780 crore in the same period last year, according to the regulatory filing by the company.
The country’s largest mortgage lender reported an increase in revenue from operations at 18.7% to ₹15,027 crore in the Q2 of FY23, as against 12,215 crore in the same period last year.
On a sequential basis, the company reported an increase in net profit by 21.4% from ₹3,668 crore in the April to June quarter this year. The revenue from operations witnessed a surge of 13.4% QoQ as against ₹13,248 crore in the June quarter of FY23.
“Non-interest expense ratios were higher largely due to an increase in upfront expenses on staffing, loan processing, branch expansion and information technology to enable meeting the increased demand for home loans. These expenses have been incurred upfront, though benefits will accrue over the ensuing quarters,” the company said in a statement.
HDFC's NII
During the quarter, the net interest income (NII) of HDFC registered a growth of 13% at ₹4,639 crore as compared to ₹4,110 crore in the same period last year. Meanwhile, the NII during the April to September period this year stood at t ₹9,086 crore compared to ₹8,235 crore in the previous year.
“During the half-year ended September 30, 2022, though lending rates have been increased, there has been a transmission lag between the interest rate increase in borrowing costs and asset repricing. During the half-year ended September 30, 2022, though lending rates have been increased, there has been a transmission lag between the interest rate increase in borrowing costs and asset repricing,” the company says.
HDFC’s loan book
As of September 30, 2022, the assets under management (AUM) stood at ₹ 6,90,284 crore as against ₹ 5,97,339 crore in the previous year. Of these, individual loans comprise 81% of the (AUM).
On an AUM basis, the growth in the individual loan book was 20% and the growth in the total loan book on an AUM basis was 16%. Notably, during the September quarter, the corporation assigned loans amounting to ₹ 9,145 crore to HDFC Bank. Loans sold in the preceding 12 months amounted to ₹ 34,513 crore. The outstanding amount in respect of individual loans sold was ₹ 93,566 crore.
Asset quality
Moreover, as of September 30, the gross individual non-performing loans (NPLs) stood at 0.91% of the individual portfolio, while the gross non-performing non-individual loans stood at 3.99% of the non-individual portfolio. The gross NPLs during the quarter stood at ₹ 9,355 crore. This is equivalent to 1.59% of the portfolio. The Corporation carried a total provision of loans worth ₹ 13,146 crore. The provisions carried as a percentage of the Exposure at Default (EAD) are equivalent to 2.21%.
