OREANDA-NEWS. May 11, 2011. The Board of Directors of Housing Development Finance Corporation Limited (HDFC) approved the thirty-fourth annual accounts of the Corporation for the year ended March 31, 2011 at its meeting held on Tuesday, May 10, 2011 in Mumbai.

FINANCIAL RESULTS

Financials for the year ended March 31, 2011

For the year ended March 31, 2011, HDFC's Net Operating Income (inclusive of profit on sale of investments) was  5,318.13 crores as against  4,297.75 crores in the previous year - an increase of 24%.

HDFC reported a profit before tax of  4,866.96 crores as compared to  3,915.99 crores for the previous year - an increase of 24%.

After providing  1,332 crores for taxes, the profit after tax for the year ended March 31, 2011 increased by 25% to  3,534.96 crores as compared with  2,826.49 crores in the previous year.

Dividend

The Board of Directors recommend payment of dividend for the year ended March 31, 2011 of  9 per equity share of face value of  2 each as against  36 per equity share of face value of  10 each in the previous year (  7.2 per equity share of face value of  2 each).

Financials for the quarter ended March 31, 2011

For the quarter ended March 31, 2011, the Net Operating Income (inclusive of profit on sale of investments) stood at  1,654.90 crores as against  1,339.78 crores in the corresponding quarter of the previous year - an increase of 24%.

HDFC's profit before tax stood at  1,553.95 crores as against  1,265.88 crores in the corresponding quarter of the previous year - an increase of 23%.

After providing  412 crores for taxes, the profit after tax for the quarter ended March 31, 2011 increased by 23% to  1,141.95 crores as against  926.38 crores in the corresponding quarter last year.

TOTAL ASSETS

As at March 31, 2011, the total assets of HDFC stood at  1,32,727 crores as against  1,11,763 crores as at March 31, 2010 - an increase of 19%.

Loan Book

As at March 31, 2011, the loan book stood at  1,17,127 crores as against  97,967 crores in the previous year - an increase of 20%. During the year, the Corporation sold loans amounting to  4,379 crores. The growth in the loan book would have been 24% had the Corporation not sold any loans during the year.

The spread on loans over the cost of borrowings for the year stood at 2.33% as against 2.31% in the previous year.

Investments

As at March 31, 2011, the unrealised gains on HDFC's listed investments amounted to  21,392 crores (previous year  16,668 crores). This excludes the appreciation in the value of the unlisted investments.

LENDING OPERATIONS

Approvals and Disbursements

Loan approvals during the year were  75,185 crores as compared to  60,611 crores in the previous year, representing a growth of 24%. Loan disbursements during the year were  60,314 crores as against  50,413 crores in the previous year, representing a growth of 20%.

Cumulative loan approvals and disbursements as at March 31, 2011 were  3,73,246 crores and  3,02,533 crores respectively. This is in respect of approximately 3.8 million housing units.

The demand for individual home loans continued to be robust, despite rising interest rates. Other enabling factors included rising disposable incomes and continued fiscal incentives on housing loans. During the year, individual approvals grew at 25% and disbursements grew by 27% as compared to the previous year. The average size of individual loans stood at  18.6 lakhs.

Non-Performing Loans

Gross non-performing loans as at March 31, 2011 amounted to  903.85 crores. This is equivalent to 0.77% of the portfolio (as against 0.79% in the previous year). This is the twenty-fifth consecutive quarter end at which the percentage of non-performing loans have been lower than the corresponding quarter in the previous year.

Based on a six months overdue basis, the non-performing loans as at March 31, 2011 stood at 0.46% of the loan portfolio as against 0.53% 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  813.53 crores, which includes the provisioning of  446.54 crores on standard assets in respect of housing loans granted under the Dual Rate Home Loan scheme.

The balance in the provision for contingencies account as at March 31, 2011 stood at  1,124.37 crores, which is equivalent to 0.95% of the portfolio. Thus as at March 31, 2011, the Corporation's net non-performing loans was nil.

RESOURCES

As at March 31, 2011, outstanding deposits stood at  24,625 crores. CRISIL and ICRA have for the sixteenth consecutive year reaffirmed "AAA" rating for HDFC's deposits.

During the year, loans drawn from commercial banks and the National Housing Bank amounted to  32,753 crores.

HDFC raised  13,865 crores through private placement of non-convertible debentures (NCDs) during the year under review. The NCDs were "AAA" rated by both CRISIL and ICRA. During the year, HDFC also raised  1,000 crores through the issue of long-term Unsecured Redeemable Non-Convertible Subordinated Debentures.

CAPITAL ADEQUACY RATIO

HDFC's capital adequacy ratio stood at 14% of the risk weighted assets, as against the minimum requirement of 12%. Tier 1 capital adequacy was 12.2% against a minimum requirement of 6%.

COST INCOME RATIO

For the year ended March 31, 2011, the cost to income ratio stood at 7.7% as compared to 7.9% in the previous year.

CONSOLIDATED FINANCIAL RESULTS

In terms of the consolidated financial accounts, the profit after tax for the year ended March 31, 2011 stood at  4,528.41crores as against  3,240.98 crores - an increase of 40%.

REVIEW OF KEY SUBSIDIARY COMPANIES

HDFC Standard Life Insurance Company Limited (HDFC Life)

Gross premium income of HDFC Life for the year ended March 31, 2011 stood at  9,004 crores as compared to  7,005 crores in the previous year a growth of 29%. The sum assured in force for the current year was  98,918 crores as compared to  72,610 crores in the previous year.

HDFC Asset Management Company Limited (HDFC-AMC)

As at March 31, 2011, HDFC-AMC managed 36 debt, equity and exchange traded fund schemes of HDFC Mutual Fund. During the year, the average assets under management stood at  95,950 crores (which is inclusive of average assets under discretionary portfolio management/advisory services).

For the year ended March 31, 2011, HDFC-AMC reported a profit after tax of  242.18 crores as against  208.37 crores in the previous year.

HDFC ERGO General Insurance Company Limited (HDFC-ERGO)

HDFC-ERGO offers a complete range of insurance products like motor, health, travel, home and personal accident in the retail segment and customised products like property, marine, aviation and liability insurance in the corporate segment.

HDFC-ERGO recorded a growth of 40% during the year, with a Gross Written Premium (including cessions from the motor pool) of  1,408 crores as against  1,005 crores in the previous year.

DISTRIBUTION NETWORK

HDFC's distribution network spans 289 outlets which include 71 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 third party direct selling associates.

To cater to non-resident Indians, HDFC has an office in London, Dubai and Singapore and service associates in Kuwait, Oman, Qatar, Sharjah, Abu Dhabi and Saudi Arabia - Al Khobar, Jeddah and Riyadh.