Top Indian Mortgage Lender’s Profit Rises on Dividend Income
(Bloomberg) -- Housing Development Finance Corp. posted a 32% rise in second-quarter profit due to a jump in dividend income.
Net income at the country’s largest mortgage lender was 37.8 billion rupees ($504 million) in the three months to September compared with 28.7 billion rupees a year ago, it said in a statement on Monday. That beat the average estimate of 35.3 billion rupees from 13 analysts in a Bloomberg survey. Dividend income rose to 11.7 billion rupees from 3.2 billion rupees a year ago.
The financier received the dividend income from holdings in its subsidiaries including HDFC Bank, HDFC Life Insurance and HDFC Asset Management Company, Chief Executive Officer Keki Mistry said in a post-earnings call.
India’s rising pace of vaccinations against Covid-19 and an improvement in the labor market is boosting consumer demand and helping lenders to improve their retail portfolio. Still, HDFC’s interest income contracted 2.3% from a year ago even as demand for home loans improved.
HDFC’s shares were up 1.6% in Mumbai at 3.27 pm, in line with the broader banking gauge.
“The demand for home loans continues to remain strong,” Mistry said. “The increasing sales momentum and new project launches augurs well for the housing sector.”
HDFC set aside 4.5 billion rupees in provisions for impairments during the September quarter, compared with 6.9 billion rupees in the three months earlier and 4.4 billion rupees a year ago.
The shadow-lender’s gross bad loan ratio stood at 2% as of September-end compared with 2.24% three months prior.
Other key numbers:
- The spread on loans over the cost of borrowings end of September was 2.29% vs 2.27% three months prior
- Assets under management grew 11% Y/Y
- Individual disbursements in October were the highest ever in a non-quarter end month
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