Housing Development Finance Corporation (HDFC ) today reported 12.9% growth in its net interest income in Q2 to ₹4,639 crore.- The housing finance company reported a 17.8% YoY growth in standalone net profit, aided by a 24% growth in interest income.
- In a clarification ahead of the merger with HDFC Bank, Keki
Mistry , HDFC’s vice chairman and CEO, said that most loans on the company’s books are those which are allowed to be underwritten by banks.
The housing finance company reported a 12.9% growth in its net interest income to ₹4,639 crore, up from ₹4,110 crore a year ago.
HDFC also reported a healthy improvement in asset quality. The total gross NPLs as on September 30 stood at ₹9,355 crore, which is equivalent to 1.59% of the portfolio, as against 2% in the same period last year.
Its gross individual non-performing loans (NPLs) stood at 0.91% while the gross non-performing non-individual loans stood at 3.99%.
Keki Mistry, vice chairman and CEO of HDFC, said that the company gives only those loans which would usually be given by banks, except acquisition funding and loans against shares to corporations.
“Loans we do are loans that banks do. We don’t do anything that banks do not do, with some exceptions,” he said.
Mistry said that, in reality, a substantial amount of HDFC’s loans would be carried forward by the merged entity. A merger of HDFC and HDFC Bank was announced in April this year.
Mistry explained that the company had received approvals for the merger from statutory authorities, including the
The merger of the two entities now awaits shareholder approval. The National Company Law Tribunal (NCLT) has approved the shareholder meeting which is scheduled to be held on November 25 this year.
Earlier in October, HDFC Bank’s chief financial officer Srinivasan Vaidyanathan had said that the overall process could take up to 8 months after the shareholders’ approval.
HDFC’s Q2 FY23 in numbers:
Source: Company reports
HDFC reported that home loan demand continued to remain strong in two segments – mid-income and high-end. Individual disbursements grew by 36% during the September quarter, according to the company. Mistry mentioned that he expected housing demand to sustain going forward.
HDFC also reported that new loan disbursements via digital channels rose to 92% during the half-year ended September 30, 2022.
The average size of loans also increased 7.9% during the half year to ₹35.7 lakh from ₹33.1 lakh a year ago. Individual loans as a percentage of the total assets under management (AUM) also rose to 81% during H1 FY23, from 78% a year ago.
“The growth is broad-based, it is happening from every part of the country. Metros like Mumbai, Delhi were not contributing much over the past two years. In the past two years, growth has been much faster in these metros,” Mistry explained during the earnings call, adding that due to the faster growth in metro cities, the share of Tier-2 and Tier-3 destinations to loan growth has come down.
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