Retail loans drive HDFC's standalone net profit up by 11 per cent

MUMBAI: Mortgage major HDFC today reported an 11 per cent rise in its standalone net profit at Rs 1,723.10 crore in the three months to March on higher retail loan growth which grew 26 per cent. "It's the volume-driven growth that we have seen in the course of the year, and that is what has contributed to our profitability," vice-chairman and chief executive Keki Mistry told reporters.

For the full year, HDFC's standalone net profit rose 12 per cent to Rs 5,440.24 crore, while profit before dividend, sale of investments and tax stood at Rs 6,635.67 crore, reflecting a growth of 15 per cent. On a consolidated basis, the full year net income grew to Rs 7,947.82 crore, a growth of 20 per cent. The mortgage lender's standalone net interest margin for the year stood at 4.1 per cent, up from 4 per cent in the December quarter, and the spread on loans stood at 2.29 per cent.

"In the last 10-15 years, our real spread has been between 2.2 and 2.3 per cent. We continue to believe the spread will continue to be broadly in that range," Mistry said.

Gross non-performing loans stood at Rs 1,357 crore, which is equivalent to 0.69 per cent of the loan portfolio as of end-March compared to 0.77 per cent in December quarter. The NPA of individual portfolio stood at 0.53 percent, while that of non-individual portfolio was 1.01 per cent.

During the quarter, HDFC received near Rs 550 crore from sale of Hiranandani Palace Gardens, a Chennai-based property, which became a non-performing assets in the second quarter of this year. The property was developed by Mumbai-based Hiranandani Group and Hirco, an ex-Hiranandani group company. HDFC declared the property an NPA after the promoters defaulted on repayment.