HDFC Q3 net profit rises 11% but gross NPA climbs

Home loan major HDFC Ltd reported an 11% increase in its net profit to Rs 3,261 crore for the third quarter ended December 31, 2021, from Rs 2,926 crore a year earlier. 

India’s mortgage lender said its net interest income for the third quarter went up by 5.3% to Rs 4,284 crore from Rs 4,068 crore in the third quarter of 2020-21.

The lender said demand for home loans and the pipeline of loan applications remains strong. It recorded growth in home loans in both the affordable housing segment as well as in high-end properties.

The increasing sales momentum and new project launches augur well for the housing sector, HDFC said. 

Other key highlights

1) Total revenue from operations rose 0.6% to Rs 11,783 crore from Rs 11,707 crore in the year-ago quarter.

2) Gross non-performing assets increased to 2.32% from 2% in the second quarter.

3) Individual approvals and disbursements grew by 45% and 48%, respectively, during the nine months ended December 31, 2021.

4) In the nine months ended December 31, 2021, HDFC’s average size of individual loans stood at Rs 32.3 lakh compared with Rs 28.5 lakh a year earlier.

5) For the third quarter, the average loan size was Rs 33 lakh.

6) The assets under management (AUM) grew to Rs 6,18,917 crore from Rs 5,52,167 crore in the previous year. Individual loans comprise 79% of the AUM.

7) Gross non-performing loans as at December 31, 2021, stood at Rs 12,419 crore.

8) Actual provisions as at December 31 stood at Rs 13,195 crore. The provisions carried as a percentage of the Exposure at Default is equivalent to 2.45%.

Management commentary

HDFC said that in December 2021 it recorded its second-highest monthly individual disbursements ever. “This is despite the fact that the previous year entailed concessional stamp duty benefits in certain states which were not there in the current year,” it said.  

HDFC also said that collection efficiency for individual loans on a cumulative basis witnessed an improvement to stand at an average of 98.9% during the quarter.