HDFC Q3 net soars 233% on profit from stake sale in insurance arm

Mortgage lender Housing Development Finance Corporation (HDFC) on Monday reported a 233% year-on-year (y-o-y) jump in its standalone net profit for the December quarter at Rs 5,670.21 crore, driven largely by a one-time gain of Rs 3,675.31 crore from the sale of its stake in HDFC Standard Life Insurance Company. Adjusted for the one-time gain, the company’s performance exceeded expectations of analysts, based on Bloomberg collated data. HDFC’s net interest income (NII) for the quarter came in at Rs 2,929 crore against Rs 2,575 crore in the same quarter last year, a rise of 14%. The lender’s total income for the quarter stood at Rs 8,695.09 crore, 6.7% higher than in the same quarter last year. Its net interest margin (NIM) at the end of the quarter stood at 3.86%, down from 3.95% at the end of December 2016. The spread on loans over the cost of borrowings at the end of Q3 FY18 stood at 2.29% compared to 2.34% in the December quarter of FY17. The spread on the individual loan book was 1.91% and on the non-individual book was 3.1%.

On an assets under management (AUM) basis, the growth in the individual loan book was 17% y-o-y and the non-individual loan book was 21% y-o-y, thus taking the growth in the total loan book to 18%. The home financier said that individual loans comprise 72% of its AUM. During the December quarter, 70% of incremental loans came from individual loans. As on December 31, the loan book stood at Rs 3.42 lakh crore against Rs 2.87 lakh crore in the previous year.

HDFC did not sell any part of its loan portfolio during the December quarter. The company said that it has made an additional provision of Rs 1,575 crore to shore up its provision and contingencies account “towards specific loans against future risk.”

HDFC Bank