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HDFC Ltd Financial Results for the Year Ended March 31, 2016 Standalone & Consolidated

Performance Highlights

  • Standalone profit after tax at Rs. 7,093 crore for the year ended March 31, 2016 – growth of 18% over the previous year
  • Standalone profit after tax at Rs. 2,607 crore for the quarter ended March 31, 2016 – growth of 40% over the previous year
  • 16% growth in the consolidated profit after tax to Rs. 10,190crore for the year ended March 31, 2016
  • 24% growth in the individual loan book (after adding back loans sold in the preceding 12 months)
  • Gross non-performing loans stood at 0.70% of the loan portfolio as at March 31, 2016
  • Final dividend of Rs. 14 per equity share of Rs. 2 per share recommended, total dividend including interim dividend: Rs. 17 per share (Previous Year: Rs. 15 per share)


The Board of Directors of Housing Development Finance Corporation Limited (HDFC) approved the standalone and consolidated audited financial results of the Corporation for the year ended March 31, 2016 at its meeting held on Monday, May 2, 2016 in Mumbai.

STANDALONE FINANCIAL RESULTS

Financials for the year ended March 31, 2016

For the year ended March 31, 2016, profit after tax stood at Rs. 7,093 crore as compared to Rs. 5,990 crore in the previous year, representing a growth of 18%.

This is after providing Rs. 3,015 crore for tax, (inclusive of Rs. 379 crore as Deferred Tax Liability on Special Reserve).

Profit before tax stood at Rs. 10,108 crore as compared to Rs. 8,624 crore in the previous year, representing a growth of 17%.

Financials for the quarter ended March 31, 2016

For the quarter ended March 31, 2016, profit after tax stood at Rs. 2,607 crore as compared to Rs. 1,862 crore in the previous year, representing a growth of 40%.

This is after providing Rs.1,035 crore for tax, (inclusive of Rs.113 crore as Deferred Tax Liability on Special Reserve).

For the quarter ended March 31, 2016, profit before tax stood at Rs. 3,642 crore as compared to Rs. 2,653 crore in the previous year, representing a growth of 37%.

DIVIDEND

In March 2016, the Board of Directors declared an interim dividend of Rs.3 per equity share of Rs.2 per share compared to Rs. 2 per equity for the previous year.

The Board of Directors recommends payment of final dividend for the year ended March 31, 2016 of Rs.14 per equity share of Rs.2 per share compared to Rs.13 per equity share for the previous year.

The total dividend for the year is Rs. 17 per equity share as against Rs. 15 per equity share for the previous year.

TOTAL ASSETS

As at March 31, 2016, the total assets of HDFC stood at Rs. 2,88,753 crore as against Rs. 2,53,952 crore as at March 31, 2015 – an increase of 14%.



LENDING OPERATIONS

Individual loan disbursements grew by 18% during the year. The average size of individual loans stood at Rs. 25 lac as against Rs.23.3 lac in the previous year.

As at March 31, 2016, the loan book stood at Rs. 2,59,224 crore as against Rs. 2,28,181 crore in the previous year.

Loans sold to HDFC Bank (pursuant to an agreement in respect of loans sourced by HDFC Bank) during the preceding twelve months was significantly higher at Rs. 12,773 crore as against Rs. 8,249 crore in the previous year. The rate of amortisation in the current year was higher than the previous year as a result of lower interest rates.

The growth in the individual loan book, after adding back loans sold in the preceding 12 months was 24% (16% net of loans sold). The non-individual loan book grew at 9%. The growth in the total loan book after adding back loans sold was 19% (14% net of loans sold).

On an Assets under Management (AUM) basis, the growth in the individual loan book was 17% and the non-individual loan book was 9%. The growth in the total loan book on an AUM basis was 15%.

Of the total loans on an AUM basis, individual loans comprise 73%. During the year, on an AUM basis, 83% of the incremental growth in the loan book came from individual loans.

As at March 31, 2016, total loans outstanding in respect of loans sold/assigned stood at Rs.32,307 crore. HDFC continues to service these loans and is entitled to the residual interest on the loans sold. The residual interest on the individual loans sold is 1.20% per annum and is being accounted for over the life of the loans and not on an upfront basis.

Non-Performing Loans

Gross non-performing loans as at March 31, 2016 amounted to Rs. 1,833 crore. This is equivalent to 0.70% of the loan portfolio. The non-performing loans of the individual portfolio stood at 0.51% while that of the non-individual portfolio stood at 1.12%.

As per NHB norms, the Corporation is required to carry a total provision of Rs. 1,959 crore of which Rs. 1,341 crore is against standard assets.

The balance in the provision for contingencies account as at March 31, 2016 stood at Rs. 2,695 crore of which Rs. 566 crore is on account of non-performing loans. This balance in the provision for contingencies is equivalent to 1.03% of the loan portfolio.

Additional One-Time Provision

During the year, the Corporation made an additional one-time provision of Rs. 450 crore against standard assets and other contingencies. This was done with the objective of further strengthening the Corporation’s balance sheet. The Corporation believes that it would be prudent to utilise a part of the exceptional gains (received from the sale of equity shares of HDFC Standard Life Insurance Company Limited) to build an additional buffer against any unexpected risk in the future. This additional provision is being done voluntarily and not on account of any regulatory requirement. Further, the provision is on standard assets. The Corporation holds adequate security in respect of all loans.

Spread and Net Interest Margin

The spread on loans over the cost of borrowings for the year ended March 31, 2016 stood at 2.29% compared to 2.32% in the previous year. The spread on the individual loan book was 1.94% and on the non-individual book was 3.10%.

Net Interest Margin for the year ended March 31, 2016 was 3.9% compared to 4% in the previous year.

INVESTMENTS

As at March 31, 2016, the unrealised gains on HDFC’s listed investments amounted to Rs. 57,651 crore (previous year Rs. 55,185 crore). This excludes the appreciation in the value of the unlisted investments.

Stake Sale of HDFC Standard Life Insurance Company Limited (HDFC Life)

In March 2016 the Corporation sold 9% of its equity shares in HDFC Life to Standard Life (Mauritius Holdings) 2006 Limited. The total consideration was Rs. 1,706 crore.

The profit on sale of this investment was Rs. 1,513 crore. As HDFC Life is an unlisted entity, the capital gains tax on the sale of shares was Rs. 300 crore. As a result of the sale of shares, the Corporation’s holding in HDFC Life is 61.6%, while Standard Life (Mauritius Holdings) 2006 Limited’s share is 35%.

The Board of Directors of HDFC Life has approved taking steps to initiate the process for an initial public offer (IPO). Accordingly, the Corporation has in-principle, agreed to sell up to 10% of its equity stake in HDFC Life through an offer-for-sale in the IPO of HDFC Life, subject to market conditions and the receipt of requisite approvals.

CAPITAL ADEQUACY RATIO

The Corporation’s capital adequacy ratio stood at 16.6%, of which Tier I capital was 13.2% and Tier II capital was 3.4%. Deferred tax liability on Special Reserve and the investment in HDFC Bank has been considered as a deduction in the computation of Tier I capital. As per the regulatory norms, the minimum requirement for the capital adequacy ratio and Tier I capital is 12% and 6% respectively.

COST INCOME RATIO

For the year ended March 31, 2016, the cost to income ratio stood at 7.6% — the same level compared to the previous year.

CONSOLIDATED FINANCIAL RESULTS

For the year ended March 31, 2016, the consolidated profit after tax stood at Rs. 10,190 crore as compared to Rs. 8,763 crore in the corresponding period in the previous year.

The share of profit from subsidiary and associate companies in the consolidated profit after tax was 30% for the year ended March 31, 2016.

The consolidated Return on Equity stood at 20.7%.

REVIEW OF KEY SUBSIDIARY COMPANIES

HDFC Standard Life Insurance Company Limited (HDFC Life)


Total premium income for the year ended March 31, 2016 stood at Rs. 16,313 crore, recording a growth of 10% over the previous year.

As at March 31, 2016, the Market Consistent Embedded Value stood atRs. 10,205 crore as compared to Rs. 8,805 crore in the previous year.

For the year ended March 31, 2016, the new business margin at the company level stood at 23.6% on a pre overrun basis and 19.8% on a post overrun basis (after the impact of the acquisition overrun).

HDFC Life has reported a profit after tax ofRs. 818 crore for the year ended March 31, 2016 as against Rs. 786 crore in the previous year.

HDFC Asset Management Company Limited (HDFC AMC)

The average assets under management of HDFC Mutual Fund for the month of March 2016 stood at Rs. 1.83 trillion (which is inclusive of assets under discretionary portfolio management and advisory services). HDFC Mutual Fund had an overall market share of 12.99%.

For the year ended March 31, 2016, HDFC AMC reported a profit after tax of Rs. 478 crore as against Rs. 416 crore in the previous year.

HDFC ERGO General Insurance Company Limited (HDFC ERGO)

The gross direct premium (excluding declined risk pool) stood at Rs. 3,380crore as against Rs. 3,182 crore in the previous year.

HDFC ERGO retained its market ranking as the fourth largest private sector player in the general insurance industry.

The profit after tax for the year ended March 31, 2016 stood at Rs. 151 crore compared to Rs. 104 crore in the previous year.

DISTRIBUTION NETWORK

HDFC’s distribution network spans 401 outlets which include 116 offices of HDFC’s distribution company, HDFC Sales Private Limited (HSPL). HDFC also covers additional locations through its outreach programmes. Distribution channels form an integral part of the distribution network with home loans being distributed through HSPL, HDFC Bank Limited and third party direct selling associates.

To cater to non-resident Indians, HDFC has representative offices in London, Dubai and Singapore and service associates in Kuwait, Oman, Qatar, Abu Dhabi and Saudi Arabia.

To View the PDF, Please Click on the Links Below:

Quarterly Results (Consolidated) – March, 2016

Quarterly Results (Standalone) – March, 2016

AnlaystMarch, 2016

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