HDFC’s loan growth has boosted its net profit in the second quarter

By | September 28, 2011

A recent press report said that the country’s largest housing finance company HDFC has reported a net profit of Rs 971crore for the quarter ended September 2011, an increase of 20% compared to the corresponding period last year.

The company has recorded a sound loan growth with advances growing 20% after factoring in loan sales. Net profits were higher than expected largely on account of profit on sale of investments of Rs.  89 crore most of which was due to receipt of proceeds of its stake sale in Intelenet, a BPO company that HDFC had promoted.

According to reports the corporation’s loan book stood at Rs. 1, 26,992 crore as against Rs. 1, 06,287 crore as at September 30, 2010. Loans sold during the preceding twelve months amounted to Rs 4,989 crore. The growth in the loan book inclusive of loans sold is 24%. Net interest margins loans over the cost of borrowings-shrunk from 2.32% on September 10 to 2.29% on September 2011.

Speaking to TOI, Keki Mistry, vice chairman and CEO, said that it was likely that RBI would hike rates in its policy in October. However, it would not necessarily lead to a corresponding rise in home loan rates. “If we can absorb an increase in costs we will not necessarily increase lending rates,” he said.

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About Pradeep Yuvaraj

Pradeep Yuvaraj is a Co-Founder and Director at Finerva Financial Solutions Private Limited, a financial education company focused on personal finance education. He has penned over 250 articles relating to Personal Finance and clocked over 500 hours of educating individuals on managing personal finance. He is a serial entrepreneur and has been associated with 7 Start-ups. His entrepreneurial experience spans industries as varied as Education, Gas Engineering, Automobile Design, Software development and more recently a Pure play presentation design company. Prior to turning entrepreneur in 2005, he has worked for 3 of the top ten companies of the world - Shell, ExxonMobil and Total SA. This experience included handling Branch Operations, Channel Sales and Business Development across 5 states over a period of 8 years. He holds an MBA from Symbiosis and an Electronics Engineering Degree from the University of Pune.

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