HDFC-Netto jumps 42% with higher interest income
The mortgage lender’s Housing Development Finance Corporation (HDFC) on Friday reported a 42% year-over-year increase in net income to Rs 3,180 billion for the quarter ended March 2021, driven by higher Interest Income (NII).
The NII grew 14% year over year to 4,065 rupees. The bottom line grew to Rs 13,025 billion despite a 19% increase in provisions over the previous year. The lender has acted on a conservative basis against the regulatory obligation to create a total provision of Rs.5,491 billion in the fourth quarter of FY21.
Keki Mistry, Vice Chairman and Chief Executive Officer, said, “The second wave and partial lockdown brought new challenges. However, given the digitalization of our business and the lessons learned from last year, we are confident that we are well prepared for the year ahead. “Demand for home loans remained due to low interest rates, lower property prices, reduced stamp tax rates in certain states and ongoing tax incentives for Home loans remain strong, Mistry said.
Net interest margin (NIM) for the quarter increased 10 basis points (basis points) to 3.5%, both sequentially and year over year. The spread in the individual loan book was 1.93% and in the non-individual book 3.22%.
The collection efficiency for individual loans was 98.0% in March 2021, compared to 96.3% in September 2020.
The individual loan payments increased by 60% compared to the corresponding quarter of the previous year. According to the lender, March 2021 saw the highest values in terms of individual income, approvals and payouts. Similarly, home loan growth has been seen in both the affordable housing and high-end real estate segments.
Asset quality came under some pressure in the March quarter. The gross non-performing loan ratio increased 7 basis points to 1.98% compared to gross distressed loans of 1.91% in the December quarter on a pro forma basis. Lenders reported NPAs on a pro forma basis in the December quarter as the Apex court stalled over declaring NPAs.
The cost-to-income ratio was 7.7% compared to 9.0% in the same period of the previous year. “The reduction in the cost / income ratio over the course of the year is due to lockdowns and restrictions caused by Covid-19. This translates into lower costs for travel and transportation, electricity costs and digitization initiatives, and has lowered the cost of printing, stationery and postage fees, “said HDFC.
The lender’s equity ratio at the end of March was 22.2%, compared to the minimum regulatory requirement of 14%.
HDFC’s board of directors approved a dividend of Rs 23 / share with a face value of Rs 2. The board also approved fundraising through non-convertible notes (NCDs) or any hybrid instrument worth up to Rs 1.25. In the meantime Keki Mistry, vice chairman and chief executive officer of the home finance company, was reappointed for an additional three years, subject to shareholder approval.
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