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Housing finance bellwether HDFC showed healthy increase in net profit for the fourth quarter of FY16 at ₹2,607 crore, up 40 per cent year-on-year (y-o-y).
FY16 performance For the fiscal FY16, net profit grew 18 per cent y-o-y to ₹7,093 crore (₹5,990 crore in FY15). The total assets of HDFC stood at ₹2,88,753 crore, a 14 per cent y-o-y increase. Cost-to-income ratio in FY16 was unchanged at 7.6 per cent.
Loan disbursements grew 18 per cent to ₹2,59,224 crore, with the average loan size for individuals increasing to ₹25 lakh in FY16 from ₹23.3 lakh in FY15. The non-individual loan book grew at 9 per cent.
Gross non-performing loans in FY16 amounted to ₹1,833 crore. This is equivalent to 0.70 per cent of the loan portfolio, up three bps y-o-y. The non-performing loans of the individual portfolio stood at 0.51 per cent and that of the non-individual portfolio was at 1.12 per cent.
HDFC made an additional one-time provision of ₹450 crore against standard assets and other contingencies with the objective of further strengthening its balance sheet. This additional provision has been done voluntarily and not on account of any regulatory requirement.
HDFC’s spread (the yield on loans minus the cost of borrowings) declined three basis points y-o-y to 2.29 per cent. Of this, the spread on the individual loan book was 1.94 per cent and on the non-individual book, 3.10 per cent. Net interest margin (NIM) also declined 10 bps to 3.9 per cent.
Capital adequacy HDFC’s capital adequacy ratio stood at 16.6 per cent, of which, Tier I capital was 13.2 per cent and Tier II capital 3.4 per cent. According to the regulatory norms, minimum requirements for capital adequacy ratio and Tier I capital are 12 per cent and 6 per cent, respectively.
Investment gains HDFC registered a profit of ₹1,513 crore by selling 9 per cent stake in HDFC Life Insurance to Standard Life (Mauritius Holdings) 2006 Ltd for ₹1,706 crore. As a result, HDFC now holds 61.6 per cent, while Standard Life’s share is 35 per cent.
The HDFC board has approved the listing of the life insurance subsidiary through an offer-for-sale, wherein HDFC has agreed in principle to sell 10 per cent stake.
Keki Mistry, Vice-Chairman and CEO of HDFC, said: “We hope to get the life insurance subsidiary listed by the end of FY17.”
HDFC Life earned a premium income of ₹16,313 crore, recording a growth of 10 per cent y-o-y. The company reported a net profit of ₹818 crore in FY16 ( ₹786 crore in FY15).
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