The company reported a 13 per cent jump in net income for the period at Rs 5,837 crore on a consolidated income of Rs 31,308 crore, which was down from Rs 39,268 crore on-year and also lower sequentially from Rs 38,604 crore in the September 2021 quarter, as the pandemic had affected loan sales.
The country's largest mortgage lender HDFC on Wednesday reported a standalone net income of Rs 3,261 crore for the three months to December 2021, logging in an 11 per cent growth over Rs 2,926 crore in the same quarter of the previous year, on higher loan sales.
On a consolidated basis, the company reported a 13 per cent jump in net income for the period at Rs 5,837 crore on a consolidated income of Rs 31,308 crore, which was down from Rs 39,268 crore on-year and also lower sequentially from Rs 38,604 crore in the September 2021 quarter, as the pandemic had affected loan sales.
Keki M Mistry, the vice-chairman and chief executive of the corporation, said the key profitability metric of net interest income for the quarter stood at Rs 4,284 crore, up from Rs 4,005 crore.
The spread -- the cost of borrowing over lending rate -- for the nine months was 2.26 per cent, of which the spread on individual loans was 1.93 per cent and on non-individual lonas 3.25 per cent. This gave the average net interest margin of 3.6 per cent.
For the nine months to December, its cost to income ratio stood at 8.1 per cent, the same as in the previous year.
Mistry explained that in November 2021, the Reserve Bank had issued a notification to lending institutions on the harmonisation of prudential norms on income recognition, asset classification and provisioning.
Accordingly, gross NPAs for individual loans stood at 1.44 per cent while the same for non-individual loans was 5.04 per cent, taking total gross NPAs to Rs 12,419 crore, equivalent to 2.32 per cent of the total portfolio.
Mistry said of the total gross NPAs, Rs 2,746 crore are less than 90 days past due. NPAs net of loans that are less than 90 days past due stood at 1.14 per cent for individuals, and for non-individuals at 3.87 per cent, and 1.81 per cent of the total portfolio.
Under the revised regulatory norms, the corporation has to carry a provision of Rs 7,450 crore but it carries an actual provision of Rs 13,195 crore or 2.45 per cent of the exposure at the default level, Mistry said, adding though there was an increase in the reported NPAs, there was no financial impact and credit costs to the company.
Due to the pandemic, the quantum of restructured loans was 1.34 per cent of the loan book. Of these, 64 per cent are individual loans and 36 per cent are non-individual loans and as much as 34 per cent of this is due to just one account, he said.
He sees its expected credit loss at Rs 1,531 crore for the nine months to December 2021, or 35 basis points (bps) of the assets, down from Rs 2,229 crore a year ago or 57 bps.
The same for the reporting quarter was Rs 393 crore, down from Rs 594 crore, indicating improved collection efficiency as well as stabilisation of credit cost on a marginal basis.
As much as 30 per cent of home loans approved in volume and 13 per cent in value were to customers from the economically weaker sections and low-income groups, he said, adding the average loan size to them stood at Rs 11.1 lakh and Rs 19.5 lakh, respectively.
HDFC has the largest number of home loan customers at over 2.7 lakh who have availed benefits under the credit-linked subsidy scheme. The cumulative loans disbursed under this stood at Rs 45,914 crore while the cumulative subsidy amount was Rs 6,264 crore.
Assets under management (AUM) rose to Rs 6,18,917 crore in Q3, from Rs 5,52,167 crore in the previous year. Of this, individual loans comprised 79 per cent. On an AUM basis, individual loan book grew 16 per cent while total AUM clipped at 12 per cent.
During the quarter, HDFC assigned loans worth Rs 7,468 crore, up from Rs 7,076 crore, to HDFC Bank, while loans sold in the preceding 12 months amounted to Rs 27,591 crore, up from Rs 16,956 crore.
Individual loans, after adding back loans sold in the preceding 12 months, grew 24 per cent, while total loans after adding back loans sold, grew by 17 per cent, he said, adding collection efficiency for individual loans improved to an average of 98.9 per cent.
Mistry said demand for home loans, led by both affordable segment as well as high-end properties, and the pipeline of loan applications continue to remain strong.
He expressed confidence that HDFC will close the year on a positive note even for the non-individual loan book, which had contracted by 1.5 per cent in FY21, as the construction finance has a decent pipeline now.
Mistry further said as much as 94 per cent of the incremental loan sale was from individual loans which now constitute as much as 79 per cent of the assets -- much higher than the 50 per cent regulatory mandate.
The company's capital adequacy stood at 22.4 per cent, with the core capital or tier 1 capital at 21.7 per cent.