India’s top mortgage lender HDFC reports 18% rise in Q2 profit

HOUSING Development Finance (HDFC), India’s largest mortgage lender, reported a 17.8 per cent rise in second-quarter profit on Thursday (Nov 3), boosted by strong demand for home loans.

Profit rose to 44.54 billion Indian rupees (S$763 million) in the three months ended Sep 30, from 37.81 billion rupees a year earlier, HDFC said in an exchange filing.

Analysts on average were expecting a profit of 41.55 billion rupees, according to Refinitiv IBES data.

Demand for housing has remained strong despite a slew of interest rates hikes aimed at containing surging inflation, although increased funding costs are likely to compress net interest margins at lenders.

“The demand for home loans continues to remain strong. Growth in home loans was seen in both mid-income segment as well as high-end properties,” HDFC said in a statement.

HDFC’s interest income rose 24 per cent to 131.43 billion rupees in the quarter.

For the first half of the year, individual disbursements grew by 36 per cent. However, net interest margin fell to 3.4 per cent in the first six months, from 3.6 per cent last year.

HDFC is set to merge with India’s largest private lender HDFC Bank to create a lending behemoth with a combined balance sheet of US$237 billion.

The lender on Thursday also approved the issue of non-convertible debentures worth up to 750 billion rupees. REUTERS