Sale of investments, higher loan offtake lift HDFC Q3 net by 32%
MUMBAI: Housing Development Finance Corporation , the nations biggest mortgage lender, said quarterly net profit rose 32% on rising loans and profit from sale of investments and forecast a stable real estate market.
Sales will remain brisk and the prices in markets where it had risen sharply may moderate a bit, said Keki Mistry, vice-chairman and managing director of HDFC, without identifying the markets.
There could be small correction in places where prices have risen sharply, Mr Mistry told ET. But I dont think people will stop buying houses if interest rates rise.
Net profit rose to Rs 891 crore for the December quarter, from Rs 671 crore a year earlier, boosted by the 200% jump in profits from sale of investments at Rs 167 crore.
Investors expect demand for homes and commercial properties to slow down as the Reserve Bank of India may raise policy rates on January 25 to tame inflation. Prices that soared in the last year, or so, could impact demand.
The increase in sales of residential units is likely to be more modest in 2011 than in 2010, rating company Fitch said in a recent report. Demand is likely to be tempered by higher prices prices increased in 2010 across the country, and in some key cities such as Mumbai, Chennai and Kolkata, prices are up by more than 40% compared with January 2008. Higher prices, combined with the increase in interest rates on mortgages in 2011, is likely to slow down growth in this segment.
In line with the Reserve Bank of India directive, the National Housing Bank had directed housing finance companies to make higher provisions for teaser home loan scheme a loan product where interest rates are lower in initial years, but increase in subsequent years.
HDFC had to make! a Rs 42 5-crore provision for the dual rate home loan scheme. Of this, it drew Rs 272 crore from additional reserves and the balance partly through P&L and utlilisation of excess provision that the company had on its book.
Disbursement to individuals rose 38% taking the loan book to Rs 109,051 crore, up 27% from a year earlier.
Bad loans comprised 0.54% of the loan and the mortgage lender provided Rs 1,093 crore for that.
Sales will remain brisk and the prices in markets where it had risen sharply may moderate a bit, said Keki Mistry, vice-chairman and managing director of HDFC, without identifying the markets.
There could be small correction in places where prices have risen sharply, Mr Mistry told ET. But I dont think people will stop buying houses if interest rates rise.
Net profit rose to Rs 891 crore for the December quarter, from Rs 671 crore a year earlier, boosted by the 200% jump in profits from sale of investments at Rs 167 crore.
Investors expect demand for homes and commercial properties to slow down as the Reserve Bank of India may raise policy rates on January 25 to tame inflation. Prices that soared in the last year, or so, could impact demand.
The increase in sales of residential units is likely to be more modest in 2011 than in 2010, rating company Fitch said in a recent report. Demand is likely to be tempered by higher prices prices increased in 2010 across the country, and in some key cities such as Mumbai, Chennai and Kolkata, prices are up by more than 40% compared with January 2008. Higher prices, combined with the increase in interest rates on mortgages in 2011, is likely to slow down growth in this segment.
In line with the Reserve Bank of India directive, the National Housing Bank had directed housing finance companies to make higher provisions for teaser home loan scheme a loan product where interest rates are lower in initial years, but increase in subsequent years.
HDFC had to make! a Rs 42 5-crore provision for the dual rate home loan scheme. Of this, it drew Rs 272 crore from additional reserves and the balance partly through P&L and utlilisation of excess provision that the company had on its book.
Disbursement to individuals rose 38% taking the loan book to Rs 109,051 crore, up 27% from a year earlier.
Bad loans comprised 0.54% of the loan and the mortgage lender provided Rs 1,093 crore for that.
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