The Hindu : Business : HDFC first quarter profit rises to Rs. 205 crores

Online edition of India's National Newspaper
Tuesday, Jul 20, 2004

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Business

HDFC first quarter profit rises to Rs. 205 crores

By Our Special Correspondent

MUMBAI, JULY 19. The Housing Development Finance Corporation Ltd (HDFC) reported a net profit of Rs. 204.62 crores for the first quarter of the current financial year ended June 30, 2004 against Rs. 167.76 crores in the corresponding period in the previous year. This is after providing Rs. 43.07 crores for tax against Rs. 37.44 crores.

"Individual loan business continued HDFC's strong growth on account of the lower interest rate environment, stable property prices, continued tax incentives and an increase in distribution network", said Deepak S. Parekh, Chairman, HDFC, here today, while addressing its 27th annual general meeting.

During the quarter under review, loan approvals aggregated Rs. 3,567 crores against Rs. 2,731 crores during the corresponding period in the previous year, a growth of 31 per cent. Disbursements amounted to Rs. 2,691 crores as compared to Rs. 2,092 crores, an increase of 29 per cent.

In June, HDFC raised subordinated debt amounting to Rs. 400 crores for a tenor of seven years. The rate of interest is floating, linked to the one-year Indian benchmark rate (one year Government of India securities rate) with a spread of 70 basis points. The rate of interest on the first setting is 5.39 per annum.

This is the first time the corporation has raised Tier-II capital, Mr. Parekh added.

With effect from March 31, 2005, the National Housing Bank (NHB) has stipulated that an asset will be classified as non-performing if the interest or instalment is overdue for 90 days. The NHB has permitted housing finance companies to phase out the additional provisioning over three years commencing from March 31, 2005, with a minimum of 20 per cent of the additional provisioning being required to be made each year. Mr. Parekh informed the AGM that HDFC has already made the necessary provisions in terms of systems, monitoring mechanisms and manpower to comply with the new norms.

The loan portfolio, including loans outstanding, deposits and investments in preference shares and debentures for financing real estate related projects, as at June 30, 2004 amounted to Rs. 30,246 crores against Rs. 23,778 crores as at June 30, 2003, an increase of 27 per cent.

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