Business News This Week
CONSOLIDATED FINANCIAL RESULTS
For the nine months ended December 31, 2013, the consolidated profit after tax stood at Rs. 5,533.12 crores as compared to Rs. 4,556.59 crores in the corresponding period last year – an increase of 21%.
The consolidated profit after tax for the nine months ended December 31, 2013 does not consider the charge in respect of the redemption premium on Zero Coupon Debentures amounting to Rs. 268.42 crores (net of tax) {Rs. 355.49 crores for the nine months ended December 31, 2012}.
Had the aforesaid charge been considered, the profit after tax for the nine months ended December 31, 2013 would have been Rs. 5,264.70 crores compared to Rs. 4,201.10 crores, representing an increase of 25%.
The share of profit from subsidiary and associate companies in the consolidated profit after tax grew to 33% for the year ended December 31, 2013 compared to 28% in the corresponding period of the previous year.
Performance Highlights
- 21% increase in the consolidated profit after tax to Rs. 5,533 crores for the nine months ended December 31, 2013 -- 25% increase (after reducing the redemption premium on Zero Coupon Debentures)
- Standalone profit before dividend, sale of investments and tax increased 17% to Rs. 4,502 crores for the nine months ended December 31, 2013
- Standalone Net Interest Margin for the nine months ended December 31, 2013 at 4.0%, spread on loans at 2.25%
- 27% growth in the individual loan book (after adding back the loans sold in the preceding 12 months)
- Gross non-performing loans reduced by 2 basis points to 0.77% of the loan portfolio as at December 31, 2013
Financials for the Nine-months ended December 31, 2013
For the nine-months ended December 31, 2013, the profit before dividend, sale of investments and tax stood at Rs. 4,501.83 crores as compared to Rs. 3,863.23 crores in the corresponding period previous year, representing a growth of 17%.
The profit after tax for the nine-months ended December 31, 2013 stood at Rs. 3,717.14 crores as compared to Rs. 3,293.13 crores in the corresponding period previous year, representing a growth of 13%.
Financials for the quarter ended December 31, 2013
For the quarter ended December 31, 2013, the profit before dividend, sale of investments and tax stood at Rs. 1,646.78 crores as compared to Rs. 1,403.60 crores in the corresponding quarter of the previous year, representing a growth of 17%.
Dividend and profit on sale of investments during the quarter ended December 31, 2013 were lower at Rs. 110.93 crores as compared to Rs. 141.50 crores in the corresponding quarter of the previous year.
The profit after tax for the quarter ended December 31, 2013, stood at Rs. 1,277.71 crores as compared to Rs. 1,140.10 crores for the corresponding quarter of the previous year, representing a growth of 12%.
TOTAL ASSETS
As at December 31, 2013 the total assets of HDFC stood at Rs. 2,18,286 crores as against Rs. 1,83,770 crores as at December 31, 2012 – an increase of 19%.
LENDING OPERATIONS
As at December 31, 2013, the loan book stood at Rs. 1,92,266 crores as against Rs. 1,60,941 crores as at December 31, 2012. Loans sold in the preceding twelve months amounted to Rs. 3,263 crores. The growth in the individual loan book, after adding back loans sold is 27% (24% net of loans sold). The growth in the total loan book, inclusive of loans sold is 21% (19% net of loans sold).
89% of the incremental growth in the loan book during the nine-months ended December 31, 2013 came from individual loans.
As at December 31, 2013, the total loans outstanding in respect of loans sold/assigned stood at Rs. 16,211 crores. HDFC continues to service these loans under these transactions and is entitled to the residual interest on the loans sold. The residual interest on the individual loans sold is 1.25% p.a. and is being accounted over the life of the loans.
Spreads and Net Interest Margins
The spread on loans over the cost of borrowings for the nine-months ended December 31, 2013 stood at 2.25%.
Net Interest Margin for the nine-month period ended December 31, 2013 was 4.0%.
Non-Performing Loans
Gross non-performing loans as at December 31, 2013 amounted to Rs. 1,478 crores. The non-performing loans reduced from 0.79% of the loan portfolio in the previous quarter to 0.77%. The non-performing loans of the individual portfolio stood at 0.57% while that of the non-individual portfolio stood at 1.18%.
As per the NHB norms, the Corporation is required to carry a total provision of Rs. 1,357 crores.
The balance in the provision for contingencies account as at December 31, 2013 stood at Rs. 1,823 crores of which Rs. 532 crores is on account of non-performing loans and the balance Rs. 1,291 crores is in respect of general provisioning on standard loans and other provisions. This balance in the provision for contingencies is equivalent to 0.95% of the portfolio. The Corporation carries an additional provision of Rs. 466 crores over the regulatory requirements.
Investments
As at December 31, 2013, the unrealised gains on HDFC’s listed investments amounted to Rs. 33,379 crores. This excludes the appreciation in the value of unlisted investments.
CAPITAL ADEQUACY RATIO
Consequent to the reduction in risk weights of mortgages, HDFC’s capital adequacy ratio increased to 19.1% of the risk weighted assets, as against the minimum requirement of 12%. Tier I capital adequacy was 16.6% as against a minimum requirement of 6%. If the investment of HDFC Bank were to be reduced from Tier I capital instead of being treated as a 100% risk weight, the adjusted CAR would be 15.8% of which Tier I: 13.3% and Tier II: 2.5%.
DISTRIBUTION NETWORK
HDFC’s distribution network spans 351 outlets, which include 91 offices of HDFC’s distribution company, HDFC Sales Private Limited (HSPL). In addition, 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 other third party selling associates.
To cater to non-resident Indians, HDFC has representative offices in London, Dubai and Singapore and service associates in Kuwait, Oman, Qatar, Sharjah, Abu Dhabi and Saudi Arabia.
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