Mumbai, Maharashtra, India
The Board of Directors of Housing Development Finance Corporation Limited (HDFC) approved the twenty-ninth annual accounts of the Corporation for the year ended March 31, 2006 at its meeting held on Tuesday, May 2, 2006 in Mumbai.
FINANCIAL RESULTS
Profit after tax for the year amounted to Rs. 1,257.30 crores as compared to Rs. 1,036.59 crores for the previous year, an increase of 21%. This is after providing Rs. 300 crores for tax (previous year Rs. 220.20 crores).
The Board of Directors recommend payment of dividend for the year ended March 31, 2006 of Rs. 20 per share as against Rs. 17 per share in the previous year.
The Return on Equity increased to 30.1% in the current year from 28.5% in the previous year. HDFC's Cost to Income Ratio declined to 12.2% for the year ended March 31, 2006 as against 12.9% in the previous year.
TOTAL ASSETS
During the year, total assets of the Corporation increased to Rs. 51,190 crores compared with Rs. 40,531 crores in the previous year, an increase of 26%.
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, 2006 amounted to Rs. 46,492 crores as against Rs. 37,216 crores in the previous year - an increase of 25%.
The spread on loans over the cost of borrowings for the year stood at 2.16%.
Investments
The unrealised gains on HDFC's listed investments amounted to Rs. 5,973 crores (previous year Rs. 3,862 crores). This excludes the appreciation in the value of the unlisted investments.
LENDING OPERATIONS
Approvals and Disbursements
Loan approvals during the year were Rs. 25,634 crores as compared to Rs. 19,715 crores in the previous year, representing a growth of 30%. Loan disbursements during the year were Rs. 20,679 crores as against Rs. 16,207 crores in the previous year, representing a growth of 28%.
Cumulative loan approvals and disbursements as of March 31, 2006 were Rs. 1,12,432 crores and Rs. 93,103 crores respectively.
Non-Performing Loans
With effect from March 31, 2005, National Housing Bank (NHB) has revised the norms for recognising non-performing assets (NPA) wherein NPAs are recognised on the basis of 90 days overdue compared to the earlier norm of six months past due.
Gross non-performing loans defined as loans where the instalments are outstanding for more than 90 days as at March 31, 2006 amounted to Rs. 446.39 crores. This is equivalent to 0.96% of the portfolio (previous year - 1.10%) comprising loans as well as preference shares and debentures issued by corporates and corporate deposits placed for financing their real estate projects. As per the earlier norms where NPAs are recognised on a six months past due basis, the non-performing loans stood at 0.79% of the loan portfolio as against 0.84% in the previous year. As per the prudential norms prescribed by NHB, HDFC is required to carry a provision of Rs. 107.63 crores.
The balance in the provision for contingencies account as at March 31, 2006 stood at Rs. 380.46 crores, which is equivalent to 0.82% of the portfolio.
CAPITAL ADEQUACY RATIO
HDFC's capital adequacy ratio stood at 15% of the risk weighted assets, as against the minimum requirement of 12%. Tier 1 capital adequacy was 8.5% against a minimum requirement of 6%.
REVIEW OF KEY SUBSIDIARY AND ASSOCIATE COMPANIES
HDFC Standard Life Insurance Company Limited (HDFC-SL)
Gross premium income for the year ended March 31, 2006 was Rs. 1,570 crores as compared to Rs. 687 crores in the previous year - a growth of 129%. New business premium income amounted to Rs. 1,026 crores as compared to Rs. 486 crores last year. The cumulative sum assured stood at Rs. 47,730 crores.
HDFC Asset Management Company Limited (HDFC-AMC)
As at March 31, 2006, HDFC-AMC managed 25 debt and equity oriented schemes of HDFC Mutual Fund. The assets under management as at March 31, 2006 stood at Rs. 21,550 crores as compared to Rs. 15,010 crores in the previous year. Equity assets account for 54% of the assets under management.
For the year ended March 31, 2006, HDFC-AMC reported a profit after tax of Rs. 45.48 crores as against Rs. 31.61 crores in the previous year, representing a growth of 44%. During the year, an interim dividend of 35% was paid in October 2005 and a final dividend of 35% was recommended, making a total dividend of 70% as against 50% in the previous year.
HDFC Chubb General Insurance Company Limited (HDFC-CHUBB)
HDFC-CHUBB offers motor insurance, commercial insurance, home insurance, group and retail accident and travel insurance and specialty insurance products. Gross Written Premium for the year stood at Rs. 206 crores as compared to Rs. 184 crores in the previous year. For the year ended March 31, 2006, HDFC-CHUBB reported a profit after tax of Rs. 4.41 crores as against a loss of Rs. 7.98 crores in the previous year.
Intelenet Global Services Private Limited (Intelenet)
Intelenet provides Business Process Outsourcing (BPO) services for organisations based in international markets. HDFC and Barclays Bank plc. each hold 50% in the venture.
For the year ended March 31, 2006, total revenue was Rs. 271.56 crores as against Rs. 250.35 crores in the previous year. EBIDTA stood at Rs. 57.41 crores as compared to Rs. 49.53 crores in the previous year. The profit after tax for the year stood at Rs. 15.13 crores. The company recommended a dividend of 7.5% for the year ended March 31, 2006.
HDFC Venture Capital Limited (HVCL)
HVCL is the investment manager to HDFC Property Fund. HDFC India Real Estate Fund (HI-REF), the first domestic scheme of the fund has a corpus of Rs. 1,000 crores. The scheme has committed approximately 71% of the corpus. The second domestic scheme, HDFC IT Corridor Fund has a corpus of Rs. 464.40 crores. This scheme has disbursed the entire corpus in rental income yielding commercial properties in major cities in India.
Currently, a scheme for international investors is being launched on a private placement basis with a target corpus of USD 750 million, including a green shoe option.
During the year, HVCL made a profit after tax of Rs. 9.08 crores and the directors have approved payment of a maiden interim dividend of Rs. 120 per share.
DISTRIBUTION NETWORK
HDFC's distribution network spans 219 outlets which include 32 offices of HDFC's distribution company, Home Loan Services India Private Limited (HLSIL). In addition, HDFC covers over 90 locations through its outreach programmes. Third party channels form an integral part of the distribution network with home loans being distributed through HLSIL, HDFC Bank Limited and other third party Direct Selling Agents (DSA).
To cater to non-resident Indians, HDFC has an office in Dubai and service associates in Bahrain, Kuwait, Oman, Qatar, Sharjah, Abu Dhabi, Al Khobar, Jeddah and Riyadh in Saudi Arabia.
Mahesh Shah, Housing Development Finance Corporation Limited, +91(22) 22820282 maheshs@hdfcindia.com
Namrata Kadekar, Housing Development Finance Corporation Limited, +91(22) 22836255 namratak@hdfc.com
Source: Housing Development Finance Corporation Limited (Business Wire India)
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