Mumbai: India’s oldest mortgage lender Housing Development Finance Corp. Ltd (HDFC) on Wednesday reported a net profit of Rs564.92 crore for the quarter ended 30 June 2009, a 20.68% increase over the Rs468.11 crore it made in the corresponding quarter last year.
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HDFC’s total loan portfolio grew 12.56% to Rs87,045.80 crore for the June quarter, against Rs77,327.10 crore in the corresponding period last fiscal. Loans to corporate entities increased 29.91% to Rs30,436.05 crore while loans to individuals rose only 5.4% to Rs54,853.74 crore, without counting the Rs5,620 crore of individual loans that HDFC sold to HDFC Bank Ltd.
The firm’s stock on Wednesday fell 4.43% at Rs2,410.30 on the Bombay Stock Exchange (BSE). BSE’s bellwether index Sensex closed 1.46% down at 14,843.12 points.
“The expenses have seen a substantial rise and the loan book has grown by 12% which is below our expectations,” said an analyst with a Mumbai-based brokerage, who declined to be named as he is not authorised to speak to the media.
The firm’s expenses increased 23.99% to Rs2,069.15 crore against Rs1,668.76 crore. Interest and other charges increased 25.15%. “The expenses have gone up on account of opening of new offices,” explained Deepak Parekh, chairman of HDFC Ltd, in his address to the annual general meeting of shareholders in Mumbai on Wednesday.
Keeping pace: Deepak Parekh, chairman, HDFC Ltd, said that demand for individual loans has continued despite the overall slowdown. Ashesh Shah / Mint
Parekh added that “The demand for individual loans continued despite the overall slowdown and uncertainty. The average size of individual loans has increased and stood at Rs15.40 lakh.”
A banking analyst with another brokerage in Mumbai said “Public sector banks are very aggressive in the housing loan market. HDFC would grow in line with the market in individual home loan segment at about 16% annually.” He also declined to be named because he is not the official spokesperson.
HDFC’s non-performing loans for the declined marginally to 0.98% from 1.09%. However, provisions for contingencies increased by 35.89% to Rs659.19 crore, compared with Rs485.06 crore in the year-ago period. HDFC’s capital adequacy ratio, or the amount of capital backing its loans, stood at 15%. Parekh also sought shareholders’ approval to raise Rs4,000 crore through private placement of securities to augment the long-term resources of the firm.