OREANDA-NEWS. The Board of Directors of Housing Development Finance Corporation Limited (HDFC) announced its unaudited consolidated and standalone financial results for the first half of the financial year 2013-14, following its meeting on Monday, October 21, 2013 in Mumbai. The accounts have been subject to a limited review by the Corporation's statutory auditors in line with the regulatory guidelines.

CONSOLIDATED FINANCIAL RESULTS

For the half year ended September 30, 2013, the consolidated profit after tax stood at ' 3,598.27 crores as compared to ' 2,850.76 crores in the half year ended September 30, 2012 - an increase of 26%.

The consolidated profit after tax for the six months ended September 30, 2013 does not consider the charge in respect of the redemption premium on Zero Coupon Debentures amounting to ' 181.35 crores (net of tax) {' 268.59 crores for the six months ended September 30, 2012}.

Had the aforesaid adjustment been considered, the profit after tax for the six months ended September 30, 2013 would have been ' 3,416.92 crores compared to ' 2,582.17 crores, representing an increase of 32%.

The share of profit from subsidiary and associate companies in the consolidated profit after tax grew to 32% for the half year ended September 30, 2013 compared to 24% in the corresponding period of the previous year.

STANDALONE FINANCIAL RESULTS

Financials for the half year ended September 30, 2013

For the six months ended September 30, 2013, the profit before dividend, sale of investments and tax stood at ' 2,855.05 crores as compared to ' 2,459.63 crores in the corresponding period of the previous year, representing a growth of 16%.

The profit after tax for the half year ended September 30, 2013 stood at ' 2,439.43 crores as compared to ' 2,153.03 crores in the corresponding period of the previous year, representing a growth of 13%.

Financials for the quarter ended September 30, 2013

For the quarter ended September 30, 2013, the profit before before dividend, sale of investments and tax stood at ' 1,464.08 crores as compared to ' 1,259.54 crores in the corresponding quarter of the previous year, representing a growth of 16%.

Dividend and profit on sale of investments during the quarter ended September 30, 2013 was lower at ' 257.25 crores as compared to ' 288.58 crores in the corresponding quarter of the previous year.

The profit after tax for the quarter ended September 30, 2013 stood at ' 1,266.33 crores as compared to ' 1,151.12 crores for the corresponding quarter of the previous year, representing a growth of 10%.

TOTAL ASSETS

As at September 30, 2013 the total assets of HDFC stood at ' 2,12,071 crores as against ' 1,80,637 crores as at September 30, 2012 - an increase of 17%.

LENDING OPERATIONS

As at September 30, 2013, the loan book stood at ' 1,84,886 crores as against ' 1,55,128 crores as at September 30, 2012. Loans sold during the preceding twelve

months amounted to ' 3,792 crores. The growth in individual loan book, after adding back loans sold is 29% (26% net of loans sold). The growth in the total loan book inclusive of loans sold is 22% (19% net of loans sold).

Of the total loan book, individual loans comprise 70%. Further, 91% of the incremental growth in the loan book during the half year ended September 30, 2013 came from individual loans.

As at September 30, 2013, the total loans outstanding in respect of loans sold/assigned stood at ' 16,497 crores. HDFC continues to service these loans under these transactions and is entitled to the residual interest on the loans sold. The residual interest on the individual loans sold is 1.29% p.a. and is being accounted over the life of the loans.

Spread and Net Interest Margins

The spread on loans over the cost of borrowings for the half year ended September 30, 2013 stood at 2.24%.

Net Interest Margin for the half year ended September 30, 2013 was 4.1%. Non-Performing Loans

Gross non-performing loans as at September 30, 2013 amounted to ' 1,473 crores. This is equivalent to 0.79% of the loan portfolio (previous year - 0.77%).

Based on a six-month overdue basis, the non-performing loans as at September 30, 2013 stood at 0.42% of the loan portfolio as against 0.48% in the previous year.

In September 2013, National Housing Bank (NHB) reduced the provisioning requirements in respect of standard loans for Commercial Real Estate - Residential Housing. Accordingly, ' 45.81 crores has been released from Standard Assets provisioning as on September 30, 2013. This amount is being adjusted through lower provisioning over a period of three quarters starting with the quarter ended September 2013.

As per the revised NHB norms, the Corporation is required to carry a total provision of ' 1,318 crores.

The balance in the provision for contingencies account as at September 30, 2013 stood at ' 1,811 crores of which ' 536 crores is on account of non-performing assets and the balance ' 1,275 crores is in respect of general provisioning on standard loans and other provisions This balance in the provision for contingencies is equivalent to 0.98% of the portfolio. The Corporation carries an additional provision of ' 493 crores over the regulatory requirements.

INVESTMENTS

As at September 30, 2013, the unrealised gains on HDFC's listed investments amounted to ' 28,938 crores. This excludes the appreciation in the value of unlisted investments.

CAPITAL ADEQUACY RATIO

Consequent to the reduction in risk weights of mortgages, HDFC's capital adequacy ratio increased to 19% of the risk weighted assets, as against the minimum requirement of 12%. Tier 1 capital adequacy was 16.5% as against a minimum requirement of 6%. If the investment in HDFC Bank were to be reduced from Tier 1 capital instead of being treated as a 100% risk weight, the adjusted CAR would be 16.1% of which Tier I: 13.5% and Tier II: 2.6%.

DISTRIBUTION NETWORK

HDFC's distribution network spans 348 outlets, which include 94 offices of HDFC's distribution company, HDFC Sales Private Limited (HSPL). In addition, HDFC 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 other few 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, Sharjah, Abu Dhabi and Saudi Arabia.