The Board of Directors of Housing Development Finance Corporation Limited (HDFC) approved the thirty-first annual accounts of the Corporation for the year ended March 31, 2008 at its meeting held on Wednesday, April 30, 2008 in Mumbai.
FINANCIAL RESULTS
For the year ended March 31, 2008, HDFC reported a profit before tax amounting to Rs. 3,373.50 crores as compared to Rs. 1,967.78 crores for the previous year - an increase of 71%. The profit before tax is inclusive of profit on sale of a part of the Corporation's investment in its subsidiaries, HDFC Standard Life Insurance Company Limited and HDFC ERGO General Insurance Company Limited and the entire sale of its holdings in its associate company, Intelenet Global Services Private Limited amounting to Rs. 636.26 crores (as compared to Rs. 32.98 crores in a subsidiary and associate company in the previous year).
After providing Rs. 937.25 crores for taxes, the profit after tax increased by 55% to Rs. 2,436.25 crores as compared with Rs. 1,570.38 crores in the previous year.
For the quarter ended March 31, 2008, HDFC's profit before tax amounted to Rs. 1,091.62 crores as against Rs. 676.12 crores in the corresponding quarter of the previous year - an increase of 61%. The profit before tax is inclusive of profit on sale of a part of the Corporation's investment in its subsidiary, HDFC ERGO General Insurance Company Limited amounting to Rs. 202.07 crores. After providing Rs. 323.50 crores for taxes, the profit after tax for the quarter ended March 31, 2008 increased by 40% to Rs. 768.12 crores as against Rs. 550.05 crores in the corresponding quarter last year.
The Board of Directors recommend payment of dividend for the year ended March 31, 2008 of Rs. 25 per share as against Rs. 22 per share in the previous year.
TOTAL ASSETS
During the year, total assets of the Corporation increased to Rs. 81,099 crores compared with Rs. 62,744 crores in the previous year, an increase of 29%.
Housing Loan Portfolio
The loan portfolio (including loans outstanding, deposits and investments in preference shares and debentures for financing real estate related projects) as at March 31, 2008 amounted to Rs. 74,104 crores as against Rs. 57,988 crores in the previous year - an increase of 28%.
The spread on loans over the cost of borrowings for the year stood at 2.32% as against 2.18% in the previous year.
Investments
As at March 31, 2008, the unrealised gains on HDFC's listed investments amounted to Rs. 10,236 crores (previous year Rs. 6,948 crores). This excludes the appreciation in the value of the unlisted investments.
LENDING OPERATIONS
Approvals and Disbursements
Loan approvals during the year were Rs. 42,520 crores as compared to Rs. 33,332 crores in the previous year, representing a growth of 28%. Loan disbursements during the year were Rs. 32,875 crores as against Rs. 26,178 crores in the previous year, representing a growth of 26%.
Cumulative loan approvals and disbursements as of March 31, 2008 were Rs. 1,88,284 crores and Rs.1,52,156 crores respectively.
Non-Performing Loans
Gross non-performing loans defined as loans where the instalments are outstanding for more than 90 days as at March 31, 2008 amounted to Rs. 621.01 crores. This is equivalent to 0.84% of the portfolio (previous year - 0.92%) comprising loans as well as debentures issued by corporates and corporate deposits placed for financing their real estate projects.
Based on a six months overdue basis, the non-performing loans as at March 31, 2008 stood at 0.68% of the loan portfolio as against 0.77% in the previous year.
In terms of the prudential norms as stipulated by the National Housing Bank, the Corporation is required to carry a provision of Rs. 224.91 crores in respect of non-performing assets and general provision on outstanding standard non-housing loans.
The balance in the provision for contingencies account as at March 31, 2008 stood at Rs. 470.30 crores, which is equivalent to 0.63% of the portfolio.
CAPITAL ADEQUACY RATIO
HDFC's capital adequacy ratio stood at 16.8% of the risk weighted assets, as against the minimum requirement of 12%. Tier 1 capital adequacy was 14.6% against a minimum requirement of 6%.
COST INCOME RATIO
For the year ended March 31, 2008, the cost to income ratio stood at 9.2%.
REVIEW OF KEY SUBSIDIARY COMPANIES
HDFC Standard Life Insurance Company Limited (HDFC-SL)
Gross premium income of HDFC-SL for the year ended March 31, 2008 stood at Rs. 4,859 crores as compared to Rs. 2,856 crores in the previous year - a growth of 70%. The cumulative sum assured in respect of policies issued increased to Rs. 87,439 crores from Rs. 67,193 crores last year.
HDFC Asset Management Company Limited (HDFC-AMC)
As at March 31, 2008, HDFC-AMC managed 34 debt and equity oriented schemes of HDFC Mutual Fund. The total assets under management as at March 31, 2008 stood at Rs. 62,747 crores, (which is inclusive of Rs. 16,537 crores of assets under discretionary portfolio management/advisory services), as compared to Rs. 36,421 crores in the previous year. The number of investor accounts increased to over 30 lacs as at March 31, 2008.
For the year ended March 31, 2008, HDFC-AMC reported a profit after tax of Rs. 117.74 crores as against Rs. 67.54 crores in the previous year, representing a growth of 74%. HDFC-AMC recommended a final dividend of 150% as against a total dividend of 100% in the previous year.
HDFC ERGO General Insurance Company Limited (HDFC-ERGO)
HDFC-ERGO offers motor insurance, commercial insurance, home insurance, group retail accident and travel insurance and specialty insurance products. Gross Written Premium for the year stood at Rs. 239.69 crores. While motor insurance accounts for a major share in the overall business, the company continues to diversify its business mix in favour of other products.
DISTRIBUTION NETWORK
HDFC's distribution network spans 250 outlets which include 52 offices of HDFC's distribution company, HDFC Sales Private Limited (HSPL). In addition, HDFC covers over 90 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 other third party Direct Selling Agents (DSA).
To cater to non-resident Indians, HDFC has an office in London and Dubai and service associates in Kuwait, Oman, Qatar, Sharjah, Abu Dhabi, Al Khobar, Jeddah and Riyadh in Saudi Arabia.
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