Performance Highlights
- Standalone profit before dividend, sale of investments and tax increased by 21% to Rs. 1,774.59 crore for the quarter ended September 30, 2014
- Standalone Net Interest Margin for the half-year ended September 30, 2014 at 4%, spread on loans at 2.29%
- 23% growth in the individual loan book (after adding back the loans sold in the preceding 12 months)
- Gross non-performing loans reduced to 0.69% of the loan portfolio as at September 30, 2014 compared to 0.79% in the previous year
The Board of Directors of Housing Development Finance Corporation Limited (HDFC) announced its unaudited standalone and consolidated financial results for the first half of the financial year 2014-15, following its meeting on Wednesday, October 22, 2014 in Mumbai. The accounts have been subject to a limited review by the Corporation’s statutory auditors in line with the regulatory guidelines.
STANDALONE FINANCIAL RESULTS
Financials for the half year ended September 30, 2014 For the six months ended September 30, 2014, the profit before dividend, sale of investments and tax stood at Rs. 3,395.95 crore as compared to Rs. 2,855.05 crore in the corresponding period of the previous year, representing a growth of 19%.
The profit after tax excluding the impact of Deferred Tax Liability (DTL) on the Special Reserve stood at Rs. 2,859.93 crore as compared to Rs. 2,439.43 crore in the corresponding period of the previous year, representing a growth of 17%.
The Corporation creates a Special Reserve through appropriation of profits in order to avail tax deduction under Section 36 (1)(viii) of the Income Tax Act, 1961. The National Housing Bank (NHB) has advised Housing Finance Companies to create a Deferred Tax Liability (DTL) on the amount transferred to the Special Reserve as a matter of prudence.
After providing Rs. 157.71 crore for the DTL on the Special Reserve, the profit after tax stood for the half-year ended September 30, 2014 stood at Rs. 2,702.22 crore, representing a growth of 11%.
Financials for the quarter ended September 30, 2014 For the quarter ended September 30, 2014, the profit before dividend, sale of investments and tax stood at Rs. 1,774.59 crore as compared to Rs. 1,464.08 crore in the corresponding quarter of the previous year, representing a growth of 21%.
The profit after tax excluding the impact of DTL on the Special Reserve stood at Rs. 1,440.83 crore compared to Rs. 1,266.33 crore in the corresponding quarter of the previous year, recording a growth of 14%.
After providing Rs. 83.27 crore for the DTL on the Special Reserve, the profit after tax stood for the quarter ended September 30, 2014 stood at Rs. 1,357.56 crore.
TOTAL ASSETS
As at September 30, 2014 the total assets of HDFC stood at Rs. 2,38,363 crore as against Rs. 2,11,759 crore as at September 30, 2013 – an increase of 13%.
LENDING OPERATIONS
As at September 30, 2014, the loan book stood at Rs. 2,12,344 crore as against Rs. 1,84,886 crore as at September 30, 2013. Loans sold in the preceding twelve months amounted to Rs. 7,825 crore. The growth in individual loan book, after adding back loans sold is 23% (16% net of loans sold). The growth in the non-individual loan portfolio stood at 11%. The growth in the total loan book inclusive of loans sold is 19% (15% net of loans sold).
Of the total loan book, individual loans comprise 71%. Further, 81% of the incremental growth in the loan book during the period came from individual loans.
As at September 30, 2014, the total loans outstanding in respect of loans sold/assigned stood at Rs. 20,756 crore. HDFC continues to service these loans and is entitled to the residual interest on the loans sold. The residual interest on the individual loans sold is 1.38% p.a. and is being accounted over the life of the loans.
Non-Performing Loans Gross non-performing loans as at September 30, 2014 amounted to Rs. 1,472 crore. This is equivalent to 0.69% of the loan portfolio (previous year – 0.79%). The non-performing loans of the individual portfolio stood at 0.53% while that of the non-individual portfolio stood at 1.02%.
As per the NHB norms, the Corporation is required to carry a total provision of Rs. 1,547 crore.
The balance in the provision for contingencies account as at September 30, 2014 stood at Rs. 1,983 crore of which Rs. 471 crore is on account of non-performing loans and the balance Rs. 1,512 crore is in respect of general provisioning on standard loans and other provisions. This balance in the provision for contingencies is equivalent to 0.93% of the portfolio. Thus the Corporation carries an additional provision of Rs. 436 crore over the regulatory requirements.
Spread and Net Interest Margins The spread on loans over the cost of borrowings for the half year ended September 30, 2014 stood at 2.29%.
Net Interest Margin for the half year ended September 30, 2014 was 4%.
INVESTMENTS
As at September 30, 2014, the unrealised gains on HDFC’s listed investments amounted to Rs. 45,871 crore (previous year Rs. 28,938 crore). This excludes the appreciation in the value of unlisted investments.
CAPITAL ADEQUACY RATIO The Corporation’s capital adequacy ratio, without reducing the investment in HDFC Bank from Tier I capital, while treating it as a 100% risk weight stood at 17.9% of the risk weighted assets, of which Tier I capital was 15.7% and Tier II capital 2.2%. The capital adequacy ratio after reducing the investment in HDFC Bank from Tier I capital stood at 15.3%, of which Tier I capital was 13% and Tier II capital was 2.3%. As per the regulatory norms, the minimum requirement for the capital adequacy ratio and Tier 1 capital is 12% and 6% respectively of the risk weighted assets.
DISTRIBUTION NETWORK HDFC’s distribution network spans 366 outlets, which include 95 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 third party direct selling associates.
To cater to non-resident Indians, HDFC has representative offices in London, Dubai and Singapore and service associates in Kuwait, Oman, Qatar, Abu Dhabi and Saudi Arabia.
CONSOLIDATED FINANCIAL RESULTS For the half year ended September 30, 2014, the consolidated profit after tax stood at Rs. 3,937.26 crore as compared to Rs. 3,598.27 crore in the corresponding period last year.
The consolidated profit after tax for the six months ended September 30, 2014 does not consider the charge in respect of the redemption premium on Zero Coupon Debentures amounting to Rs. 203.81 crore (net of tax) {Rs. 181.35 crore for the six months ended September 30, 2013}.
Had the aforesaid adjustment been considered, the profit after tax excluding the impact of DTL on Special Reserve for the six months ended September 30, 2014 would have been Rs. 3,900.06 crore compared to Rs. 3,416.92 crore, representing a growth of 14%.
After considering the effect of the DTL on the Special Reserve of Rs. 166.61 crore, the consolidated profit after tax for the six months ended September 30, 2014 would have been Rs. 3,733.45 crore.
The share of profit from subsidiary and associate companies in the consolidated profit after tax stood at 31% for the half year ended September 30, 2014.
To view the results, please click on the links given below:
Standalone Results Sep 2014 Consolidated Results Sep 2014 September 2014 
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