Housing Development Finance Corporation (HDFC) Ltd reported a 1.7 per cent drop in its net profit in the first quarter of the fiscal at ₹3,000.67 crore. Its net profit was ₹3,051.52 crore in the quarter ended June 30, 2020.

In a statement on Monday, HDFC Ltd said the profit numbers for the quarter ended June 30, 2021, however, are not directly comparable with that of the previous year. This is due to lower profit on sale of investments, lower dividend, higher charge for employee stock options and the effective tax rate of 23.1 per cent in 2021-22 as against 15.4 per cent last fiscal.

“In the previous year, the tax on capital gains on the sale of equity shares was low on account of grandfathering provisions as per the Income Tax Act, 1961,” it said.

HDFC provided ₹903.9 crore for tax in the quarter ended June 30, 2021 as against ₹555.31 crore a year ago.

However, shrugging off the impact of the second Covid wave, its net interest income surged by 22 per cent for the quarter ended June 30, 2021 to ₹4,147 crore compared to ₹3,392 crore in the previous year. Net interest margin was 3.7 per cent for the first quarter of the fiscal as against 3.1 per cent a year ago.

The country’s largest mortgage financier also saw robust growth in individual loan disbursements at 181 per cent year on year in the first quarter of the fiscal.

“Business has reverted back to normal in June and July was an extremely strong month for us. July 2021 disbursements were the highest ever in a non-quarter end month. July 2021 was the third highest in the history of HDFC,” said Keki Mistry, Vice-Chairman and Chief Executive Officer, HDFC Ltd.

The gross non-performing loans as of June 30, 2021 stood at ₹11,120 crore or 2.24 per cent of the loan portfolio. This was higher compared to 1.98 per cent as on March 31, 2021 and 1.87 per cent as on June 30, 2020.

As per regulatory norms, HDFC is required to carry a total provision of ₹5,778 crore. Its expected credit loss for the quarter ended June 30, 2021 was at ₹686 crore compared to ₹1,199 crore a year ago.

As at June 30, 2021, ₹4,482 crore has been restructured under the RBI’s Resolution Framework for Covid-19 related stress, which amounts to 0.9 per cent of the loan book.

Of the loans restructured, 38 per cent are individual loans and 62 per cent non-individual loans, HDFC said, adding that of the total restructured loans, 62 per cent is in respect of just one account.

The overall collection efficiency ratio for individual loans has improved during the month of June 21 to pre-Covid levels. The collection efficiency for individual loans on a cumulative basis in June 2021 stood at 98.3 per cent compared to 98 per cent in March 2021.

The assets under management grew 8.1 per cent to ₹5,74,136 crore as of June 30, 2021 from ₹5,31,186 crore in the previous year.

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