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HDFC Ltd Financial Results for the Quarter and Nine Months Ended December 31, 2017 Standalone and Consolidated
January 29, 2018
Business Wire IndiaPERFORMANCE HIGHLIGHTS
STANDALONE FINANCIAL RESULTS
Financials for the quarter ended December 31, 2017
The reported profit before tax for the quarter ended December 31, 2017 stood at Rs 6,490 crore compared to Rs 2,531 crore in the corresponding quarter of the previous year.
In the quarter ended December 31, 2017, the Corporation received Rs 5,250 crore (net of estimated expenses, which are yet to be fully crystalised) from the initial public offer (IPO) of HDFC Standard Life Insurance Company Limited (HDFC Life). The Corporation also created an additional special provision (as a charge to the statement of profit and loss) of Rs 1,575 crore, being 30% of the pre-tax gains on this transaction, thereby building an additional buffer against any unexpected risk in the future.
The reported profit after tax for the quarter ended December 31, 2017 stood at Rs 5,670 crore compared to Rs 1,701 crore in the corresponding quarter of the previous year.
Financials for the nine months ended December 31, 2017
The reported profit before tax for the nine months ended December 31, 2017 stood at Rs 11,756 crore compared to Rs 7,788 crore in the corresponding period of the previous year.
The reported profit after tax for the nine months ended December 31, 2017 stood at Rs 9,327 crore compared to Rs 5,398 crore in the corresponding period of the previous year.
LENDING OPERATIONS
Increased Focus on Affordable Housing
In support of the government’s flagship scheme, ‘Housing For All’, the Corporation has increased its efforts towards loans to the Economically Weaker Section (EWS) and Low Income Group (LIG).
During the nine months ended December 31, 2017, 39% of home loans approved in volume terms and 20% in value terms have been to customers from the EWS and LIG segment.
The Corporation on an average has been approving 8,000 loans on a monthly basis to the EWS and LIG segment, with monthly average approvals at approximately Rs 1,300 crore.
During the nine months ended December 31, 2017, in value terms, loans to the EWS and LIG segment grew by 32% and 39% respectively over the corresponding period in the previous year.
The average home loan to the EWS and LIG segment stood at Rs 10.24 lac and Rs 17.38 lac respectively.
Overall Lending Operations
Total individual loan disbursements grew by 27% during the nine months ended December 31, 2017. The average size of individual loans stood at Rs 26.2 lac.
On an Assets under Management (AUM) basis, the growth in the individual loan book was 17% and the non-individual loan book was 21%. The growth in the total loan book was 18%.
As at December 31, 2017, individual loans comprise 72% of the AUM. 70% of incremental loans came from individual loans and the balance from non-individual loans.
As at December 31, 2017, the loan book stood at Rs 3,42,136 crore as against Rs 2,86,876 crore in the previous year.
The Corporation did not sell any loans during the quarter ended December 31, 2017. Total individual loans sold during the preceding twelve months amounted to Rs 12,078 crore.
As at December 31, 2017, the outstanding amount in respect of individual loans sold was Rs 41,372 crore. HDFC continues to service these loans and is entitled to the residual income on the loans sold. The residual income on the individual loans sold stood at 1.27% per annum and is being recognised over the life of the loans and not on an upfront basis.
The growth in the individual loan book, after adding back loans sold in the preceding 12 months was 25% (19% net of loans sold). The non-individual loan book grew at 21%. The growth in the total loan book after adding back loans sold was 23% (19% net of loans sold).
Non-Performing Loans (NPL)
Gross non-performing loans as at December 31, 2017 stood at Rs 3,937 crore. This is equivalent to 1.15% of the loan portfolio. The non-performing loans of the individual portfolio stood at 0.67% while that of the non-individual portfolio stood at 2.18%.
As per National Housing Bank norms, the Corporation is required to carry a total provision of Rs 2,771 crore of which Rs 1,529 crore is against standard assets and Rs 1,242 crore is towards regulatory provisioning for non-performing assets.
As against this, the balance in the Provisions and Contingencies Account as at December 31, 2017 stood at Rs 4,889 crore. This is equivalent to 1.42% of the loan portfolio.
Net Interest Income
For the quarter ended December 31, 2017
The net interest income for the quarter ended December 31, 2017 stood at Rs 2,929 crore compared to Rs 2,575 crore in the corresponding quarter of the previous year, representing a growth of 14%.
For the nine months ended December 31, 2017
The net interest income for the nine months ended December 31, 2017 stood at Rs 8,125 crore compared to Rs 7,102 crore in the corresponding period of the previous year, representing a growth of 14%.
Spread and Margin
The spread on loans over the cost of borrowings for the nine months ended December 31, 2017 stood at 2.29% which was at the same level for the half-year ended September 30, 2017. The spread on the individual loan book was 1.91% and on the non-individual book was 3.10%.
Net Interest Margin for the nine months ended December 31, 2017 was 3.9%.
The unaccounted gains on listed investments as at January 25, 2018 stood at Rs 1,59,761 crore. This excludes the appreciation in the value of unlisted investments.
CAPITAL ADEQUACY RATIO
The Corporation’s capital adequacy ratio stood at 16.9%, of which Tier I capital was 14.5% and Tier II capital was 2.4%. Deferred tax liability on Special Reserve and the investment in HDFC Bank has been considered as a deduction in the computation of Tier I capital. As per the regulatory norms, the minimum requirement for the capital adequacy ratio and Tier I capital is 12% and 6% respectively.
CONSOLIDATED FINANCIAL RESULTS
For the quarter ended December 31, 2017, the consolidated profit after tax at Rs 6,677 crore as compared to Rs 2,729 crore in the corresponding quarter last year.
For the nine months ended December 31, 2017, the consolidated profit after tax stood at Rs 12,280 crore as compared to Rs 7,972 crore in the corresponding period last year.
The share of profit from subsidiary and associate companies in the consolidated profit after tax stood at 24% for the nine months ended December 31, 2017.
DISTRIBUTION NETWORK
HDFC’s distribution network spans 453 outlets which include 140 offices of HDFC’s distribution company, HDFC Sales Private Limited (HSPL). HDFC covers additional locations through its outreach programmes. Distribution channels form an integral part of the distribution network with home loans being distributed through HSPL, HDFC Bank Limited and third party direct selling associates.
To cater to non-resident Indians, HDFC has offices in London, Dubai and Singapore and service associates in Kuwait, Oman and Saudi Arabia.
Source: Businesswire
- 18% growth in the overall loan book on an Assets Under Management (AUM) basis as at December 31, 2017
- 25% growth in individual loans (after adding back loans sold in the preceding 12 months)
- 39% of home loans approved in the financial year so far is towards the Economically Weaker Section & Low Income Group[1]
- Spreads hold steady at 2.29%, Net Interest Margin at 3.9%
- For the quarter ended December 31, 2017
- Standalone Reported Profit After Tax stood at Rs 5,670 crore, which is inclusive of the proceeds from the IPO of HDFC Life (PY 1,701 crore)
- 14% growth in Net Interest Income
- For the nine months ended December 31, 2017
- Standalone Profit After Tax stood at Rs 9,327 crore (PY Rs 5,398 crore)
- Consolidated Profit After Tax stood at Rs 12,280 crore (PY Rs 7,972 crore)
STANDALONE FINANCIAL RESULTS
Financials for the quarter ended December 31, 2017
The reported profit before tax for the quarter ended December 31, 2017 stood at Rs 6,490 crore compared to Rs 2,531 crore in the corresponding quarter of the previous year.
In the quarter ended December 31, 2017, the Corporation received Rs 5,250 crore (net of estimated expenses, which are yet to be fully crystalised) from the initial public offer (IPO) of HDFC Standard Life Insurance Company Limited (HDFC Life). The Corporation also created an additional special provision (as a charge to the statement of profit and loss) of Rs 1,575 crore, being 30% of the pre-tax gains on this transaction, thereby building an additional buffer against any unexpected risk in the future.
The reported profit after tax for the quarter ended December 31, 2017 stood at Rs 5,670 crore compared to Rs 1,701 crore in the corresponding quarter of the previous year.
Financials for the nine months ended December 31, 2017
The reported profit before tax for the nine months ended December 31, 2017 stood at Rs 11,756 crore compared to Rs 7,788 crore in the corresponding period of the previous year.
The reported profit after tax for the nine months ended December 31, 2017 stood at Rs 9,327 crore compared to Rs 5,398 crore in the corresponding period of the previous year.
LENDING OPERATIONS
Increased Focus on Affordable Housing
In support of the government’s flagship scheme, ‘Housing For All’, the Corporation has increased its efforts towards loans to the Economically Weaker Section (EWS) and Low Income Group (LIG).
During the nine months ended December 31, 2017, 39% of home loans approved in volume terms and 20% in value terms have been to customers from the EWS and LIG segment.
The Corporation on an average has been approving 8,000 loans on a monthly basis to the EWS and LIG segment, with monthly average approvals at approximately Rs 1,300 crore.
During the nine months ended December 31, 2017, in value terms, loans to the EWS and LIG segment grew by 32% and 39% respectively over the corresponding period in the previous year.
The average home loan to the EWS and LIG segment stood at Rs 10.24 lac and Rs 17.38 lac respectively.
Overall Lending Operations
Total individual loan disbursements grew by 27% during the nine months ended December 31, 2017. The average size of individual loans stood at Rs 26.2 lac.
On an Assets under Management (AUM) basis, the growth in the individual loan book was 17% and the non-individual loan book was 21%. The growth in the total loan book was 18%.
As at December 31, 2017, individual loans comprise 72% of the AUM. 70% of incremental loans came from individual loans and the balance from non-individual loans.
As at December 31, 2017, the loan book stood at Rs 3,42,136 crore as against Rs 2,86,876 crore in the previous year.
The Corporation did not sell any loans during the quarter ended December 31, 2017. Total individual loans sold during the preceding twelve months amounted to Rs 12,078 crore.
As at December 31, 2017, the outstanding amount in respect of individual loans sold was Rs 41,372 crore. HDFC continues to service these loans and is entitled to the residual income on the loans sold. The residual income on the individual loans sold stood at 1.27% per annum and is being recognised over the life of the loans and not on an upfront basis.
The growth in the individual loan book, after adding back loans sold in the preceding 12 months was 25% (19% net of loans sold). The non-individual loan book grew at 21%. The growth in the total loan book after adding back loans sold was 23% (19% net of loans sold).
Non-Performing Loans (NPL)
Gross non-performing loans as at December 31, 2017 stood at Rs 3,937 crore. This is equivalent to 1.15% of the loan portfolio. The non-performing loans of the individual portfolio stood at 0.67% while that of the non-individual portfolio stood at 2.18%.
As per National Housing Bank norms, the Corporation is required to carry a total provision of Rs 2,771 crore of which Rs 1,529 crore is against standard assets and Rs 1,242 crore is towards regulatory provisioning for non-performing assets.
As against this, the balance in the Provisions and Contingencies Account as at December 31, 2017 stood at Rs 4,889 crore. This is equivalent to 1.42% of the loan portfolio.
Net Interest Income
For the quarter ended December 31, 2017
The net interest income for the quarter ended December 31, 2017 stood at Rs 2,929 crore compared to Rs 2,575 crore in the corresponding quarter of the previous year, representing a growth of 14%.
For the nine months ended December 31, 2017
The net interest income for the nine months ended December 31, 2017 stood at Rs 8,125 crore compared to Rs 7,102 crore in the corresponding period of the previous year, representing a growth of 14%.
Spread and Margin
The spread on loans over the cost of borrowings for the nine months ended December 31, 2017 stood at 2.29% which was at the same level for the half-year ended September 30, 2017. The spread on the individual loan book was 1.91% and on the non-individual book was 3.10%.
Net Interest Margin for the nine months ended December 31, 2017 was 3.9%.
INVESTMENTS
The unaccounted gains on listed investments as at January 25, 2018 stood at Rs 1,59,761 crore. This excludes the appreciation in the value of unlisted investments.
CAPITAL ADEQUACY RATIO
The Corporation’s capital adequacy ratio stood at 16.9%, of which Tier I capital was 14.5% and Tier II capital was 2.4%. Deferred tax liability on Special Reserve and the investment in HDFC Bank has been considered as a deduction in the computation of Tier I capital. As per the regulatory norms, the minimum requirement for the capital adequacy ratio and Tier I capital is 12% and 6% respectively.
CONSOLIDATED FINANCIAL RESULTS
For the quarter ended December 31, 2017, the consolidated profit after tax at Rs 6,677 crore as compared to Rs 2,729 crore in the corresponding quarter last year.
For the nine months ended December 31, 2017, the consolidated profit after tax stood at Rs 12,280 crore as compared to Rs 7,972 crore in the corresponding period last year.
The share of profit from subsidiary and associate companies in the consolidated profit after tax stood at 24% for the nine months ended December 31, 2017.
DISTRIBUTION NETWORK
HDFC’s distribution network spans 453 outlets which include 140 offices of HDFC’s distribution company, HDFC Sales Private Limited (HSPL). HDFC covers additional locations through its outreach programmes. Distribution channels form an integral part of the distribution network with home loans being distributed through HSPL, HDFC Bank Limited and third party direct selling associates.
To cater to non-resident Indians, HDFC has offices in London, Dubai and Singapore and service associates in Kuwait, Oman and Saudi Arabia.
[1] Economically Weaker Section: Household income up to Rs 3 lac p.a.
Low Income Group: Household income greater that Rs 3 lac up to Rs 6 lac p.a.
Low Income Group: Household income greater that Rs 3 lac up to Rs 6 lac p.a.
Source: Businesswire
