Housing Development Finance Corporation (HDFC) has reported a net profit of ₹4,425 crore for Q4FY23, 20 per cent higher on year. Profit after tax for FY23 was 18 per cent higher at ₹16,239 crore.

Growth in home loans was predominantly seen in the mid-income segment and high-end properties, HDFC said. Individual loan disbursements grew 16 per cent y-o-ywith the company recording highest ever monthly individual disbursements in March.

HDFC said certain non-individual exposures have been run down on maturity to ensure compliance ahead of the merger with HDFC Bank.

Also read: HDFC Bank: RBI hasn’t handed out a sweetener!

Corporate loans

In the investor call, CEO Keki Mistry said there has been significant run down of corporate loans and while HDFC may look at some more in the coming months, it will not be much hereon. He added that the priority sector lending (PSL) compliant book of HDFC, in lieu of the merger, stood at ₹1.1-lakh crore as of March 31.

Net interest income (NII) for the quarter was up 16 per cent at ₹5,321 crore and NIM was at 3.7 per cent. For FY23, NII was ₹19,248 crore and NIM was 3.6 per cent.

Given that HDFC has always targeted a NIM of 3.3-3.5 per cent, Mistry said a higher NIM reflects the company’s ability to manage transmission of interest rates.

AUM was up 11 per cent y-o-y at ₹7.2-lakh crore as of March 31, of which individual loans comprised 83 per cent. Of the new loan applications received in FY23, 94 per cent were through digital channels.

Owing to volatile equity markets, net gain on investments fell to ₹362 crore from ₹938 crore last year, HDFC said, adding that profit on sale of investments was ₹184 crore, also lower than ₹263 crore. Mistry said a lot of the incremental borrowings by HDFC have been long-term borrowings to ensure elongating of tenure of its liabilities. The company is also reducing the level of corporate deposits and increasing individual deposits as they typically have a longer tenure.

While the company has scheduled repayments or maturities of ₹10,000-15,000 crore every month, 75 per cent of the deposits tend to get renewed on maturity, and so the net repayments on maturity are much lower, Mistry said. Gross mobilisation of liabilities in Q4 was ₹75,000 crore.

HDFC also incurred higher non-interest expenses in FY23 due to an increase in expenses on staffing, information technology and one-time merger related expenses

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