Despite lower growth in loan book, Housing Development Finance Corporation (HDFC) reported a 27 per cent year-on-year increase in fourth quarter standalone net profit on the back of healthy growth in net interest income and dividend income, and sharp decline in employee benefit expenses.
India’s largest standalone housing finance company (HFC) reported a net profit of ₹2,862 crore in the quarter ended March 31, 2019, against ₹2,257 crore in the year-ago quarter.
The board of directors proposed a final dividend of ₹17.50 per share (₹16.50 in the previous year). This is in addition to the interim dividend of ₹3.50 per share (same as in the previous year) declared by the board of directors on March 6, 2019.
The net interest income (the difference between interest earned and interest expended) in the reporting quarter was up 19 per cent at ₹3,161 crore (₹2,650 crore in the year-ago period).
Dividend income jumped 62 per cent y-o-y to ₹537 crore in the reporting quarter. Also, boosting the bottomline was a ₹167-crore net gain on fair value changes (against net loss of ₹74.52 crore in the year-ago period).
On the expenses side, the provision towards impairment on financial instruments jumped 60.5 per cent y-o-y to ₹398 crore. However, employee benefit expenses shrunk 68 per cent y-o-y to ₹123 crore.
The growth in the total loan book was lower at 15 per cent in FY19, against 18 per cent in the previous year.
“The lower growth in the loan book was due to the unfavourable lending environment for non-individual loans that prevailed in the second half of the financial year.
“Tight liquidity conditions, over-leverage and credit rating downgrades led to heightened risks across the corporate sector. In order to preserve asset quality, the corporation opted to be prudent by curtailing some of its lending to non-individual loans,” the lender said in a statement.
As of March 31, 2019, the loan book stood at ₹4,06,607 crore, against ₹3,62,811 crore in the previous year.
Total individual loan disbursements grew by 15 per cent in FY19 against 29 per cent in FY18. The average size of individual loans increased to ₹27 lakh (₹26.40 lakh).
Gross non-performing loans as of March 31, 2019, stood at ₹4,777 crore (₹4,019 crore as of March-end 2018). This is equivalent to 1.18 per cent (1.11 per cent) of the loan portfolio.
Non-performing loans of the individual portfolio stood at 0.70 per cent (0.64 per cent), while that of the non-individual portfolio stood at 2.34 per cent (2.18 per cent).
HDFC shares closed at ₹1,951.70 apiece, up 1.06 per cent over the previous close on the BSE.