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HDFC reports 43% jump in Q4 profit; to remain watchful for impact of second wave – Mint

Housing finance major Housing Development Finance Corp. Ltd (HDFC) on Friday reported a 42% jump in net profit due to healthy net interest income growth and other income.

Standalone net profit stood at Rs3,180 crore in the quarter ended March as compared w Rs2,233 crore a year ago. The housing finance company had posted a net profit of Rs2,926 crore in the previous quarter.

The net interest income (NII) saw a 10% growth to Rs4,065 crore for the quarter ended 31 March 2021 stood as compared with Rs3,564 crore in the previous year. Net interest margin stood at 3.5%, up 10 bps quarter-on-quarter and year-on-year. Margins expanded due to rise in non-individual spreads.

Individual loan disbursements grew by 60% in the fourth quarter compared with the corresponding quarter of the previous year. March 2021 witnessed the highest levels in terms of individual receipts, approvals and disbursements. Growth in home loans was seen in both the affordable housing segment as well as high-end properties.

Other income grew 62% year-on-year to Rs1,224 crore, on account of dividend income. The bank has made provisions worth Rs719 crore during the quarter, including covid-19 provisions, taking cumulative covid-related provisions to Rs844 crore.

Asset quality was largely steady, however; reported gross non-performing assets rose to 1.98% as against 1.9%. Collection efficiency in individual loans improved to 98% versus 97.6% in the previous quarter.

The company said it restructured loans worth Rs4,479 crore under the RBI’s Resolution Framework for Covid-19 Related Stress. Of the loans being restructured, 27% are individual loans and 73% non-individual loans.

“At this juncture, there continues to be a great deal of uncertainty on the duration and intensity of the second covid-19 wave and the resultant impact it may have on the corporation and the overall economy,” the company said in the statement.

HDFC’s board approved a dividend worth Rs23 per share with a face value of Rs2 on 7 May. The board also approved fundraising through non-convertible debentures or any hybrid instrument worth up to Rs1.25 trillion on a private placement basis.

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