Insurance arm IPO proceeds boost HDFC profit

The corporation received Rs 5,250 crore (net of estimated expenses, which are yet to be fully crystalised) from the IPO of HDFC Life.

By: ENS Economic Bureau | Mumbai | Published: January 30, 2018 1:22:14 am
HDFC, HDFC profit, HDFC third quarter revenue, IPO, HDFC Standard Life Insurance Company, business news, Indian express Total individual loan disbursements grew by 27 per cent during the nine months ended December 2017.

Mortgage major HDFC has reported a higher net profit of Rs 5,670 crore during the third quarter ended December 2017 on a standalone basis against Rs 1,701 crore in the same period a year earlier. However, the net profit also included the proceeds from the IPO of HDFC Standard Life Insurance Company.

The corporation received Rs 5,250 crore (net of estimated expenses, which are yet to be fully crystalised) from the IPO of HDFC Life. It also created an additional special provision (as a charge to the statement of profit and loss) of Rs 1,575 crore, being 30 per cent of the pre-tax gains on this transaction, thereby building an additional buffer against any unexpected risk in the future.

Total individual loan disbursements grew by 27 per cent during the nine months ended December 2017. “The average size of individual loans stood at Rs 26.2 lakh. On an assets under management (AUM) basis, the growth in the individual loan book was 17 per cent and the non-individual loan book was 21 per cent. The growth in the total loan book was 18 per cent,” it said.

As of December 2017, individual loans comprise 72 per cent of the AUM and 70 per cent of incremental loans came from individual loans and the balance from non-individual loans. The loan book stood at Rs 3,42,136 crore as against Rs 2,86,876 crore in the previous year. Total individual loans sold during the preceding 12 months amounted to Rs 12,078 crore.

As at December 31, 2017, the outstanding amount in respect of individual loans sold was Rs 41,372 crore. “HDFC continues to service these loans and is entitled to the residual income on the loans sold. The residual income on the individual loans sold stood at 1.27 per cent per annum and is being recognised over the life of the loans and not on an upfront basis,” it said.

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