The Hindu Business Line : HDFC net profit up 32% on healthy loan growth

Mumbai, Oct. 17 Housing loan major HDFC Ltd saw net profit for the second quarter rise to Rs 534 crore, up 32 per cent from Rs 403 crore in the same quarter last year, on the back of strong loan growth.

Last year, the company had an exceptional income of Rs 242 crore from the sale of Intelenet Global Services. If the exceptional income were included, the net profit for this quarter would have been lower by 17 per cent.

The growth in profits is in line with the business growth, said Mr Conrad D’Souza, Senior General Manager, Treasury, HDFC.

Total loans grew by 31 per cent growth to Rs 81,192 crore (Rs 62,020 crore). Of this, loans to individuals grew by 31 per cent to Rs 54,728 crore (Rs 41,874 crore).

No retail slowdown

“There has been no slowdown in retail loans. But there has been a slowdown because of the current high interest rate environment,” Mr D’Souza said.

The lender has not given loans for real estate projects when property prices went up and valuations were unusually high.

In some cases, the company had asked for higher collateral from builders and developers, he said.

For the period ended September 30, 2008, spreads were at 2.24 per cent, marginally lower from 2.26 per cent in the earlier quarter, due to rising interest rates.

The cost of borrowing also went up marginally to 9.35 per cent, from 9 per cent, due to rising interest rates.

“The target is to maintain spreads around 2 per cent,” Mr D’Souza said.

Loan approvals up

Loan approvals for the period ended September 30, 2008, amounted to Rs 24,180 crore (Rs 18,948 crore), a growth of 28 per cent.

Loan disbursements grew by 25 per cent to Rs 17,788 crore (Rs 14,275 crore). The target for loan disbursals for this fiscal is 25 per cent, Mr D’Souza added.

The percentage of gross non-performing loans was 1.04 per cent (1.16 per cent).

Shares of HDFC closed at Rs 1,776.65, down 1.37 per cent from the previous close of Rs 1,801.15, on the BSE, on Friday.

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