HDFC, the country’s largest housing finance company, on Monday reported a 22 per cent fall in standalone profits for the quarter ended March 31, 2020, as provisions climbed amid disruptions due to coronavirus.
HDFC posted a net profit of Rs 2,232.53 crore compared with Rs 2,861.58 crore in the year-ago period. During the quarter, the impairment on financial instruments or expected credit loss rose to Rs 1,274 crore against Rs 398 crore in the corresponding period of the previous year, HDFC said.
Speaking to the press on Monday, Keki Mistry, CEO and vice-chairman HDFC, said that while the corporate segment witnessed robust growth in loans till March 15, there were hardly any disbursements during the second half of the month because of the spread of coronavirus and the resulting lockdown. Incidentally, this is the period when growth in loans is at its highest.
The impact of this was seen in the individual loan book, which grew a modest 14 per cent. HDFC said as on March 31, 2020, the loan book stood at Rs 4,50,903 crore against Rs 4,06,607 crore in the previous year, a growth of 11 per cent.
The corporation added that as on March 31, 2020, individual loans comprised 76 per cent of the assets under management (AUM). Individual loans accounted for 89 per cent of the incremental growth in AUM. It further said that given the prolonged uncertainty and risk averseness in the lending environment for non-individual loans, it continued to be prudent in lending.
Mistry disclosed that about 26 per cent of the total AUM had opted for the moratorium. He added that the fall in profits was largely on account of the higher provisions, a sharp fall in dividend income and a drop in profit on the sale of investments which stood at Rs 2 crore compared with Rs 321 crore in the year-ago period.
“The gross non-performing loans as on March 31, 2020, stood at Rs 8,908 crore. This is equivalent to 1.99 per cent of the loan portfolio. The non-performing loans of the individual portfolio stood at 0.95 per cent while that of the non-individual portfolio stood at 4.71 per cent,” it said.
