NEW DELHI: Merger-bound mortgage major HDFC on Thursday reported an 18% growth in net income to Rs 4,454 crore for the second quarter of the financial year 2022-23, mainly driven by higher retail loan sales that hit an eight-year high of 36%.
On a consolidated basis, it reported a higher 24% increase in net income to Rs 7,043 crore from Rs 5,670 crore, buoyed by higher dividends from the subsidiaries, which nearly doubled to Rs 2,046 crore from Rs 1,188 crore. However, the profit from the sale of investments fell to Rs 184 crore from Rs 263 crore.
The company has reported a flat net interest margin of 3.4%. Its vice-chairman and chief executive Keiky Mistry explained that unlike banks, which reprice loans and deposits on a monthly basis, especially in a rising interest rate scenario, housing finance companies reprice loans with a higher lag of 1.5 months while the cost of funds gets repriced immediately. This has had a 10-12 bps compression in the margins during this quarter.
“This lagged transmission is the only reason for the flat NIM in the reporting quarter, and the impact of the lending rate hikes, which we did during this period should be visible from the third quarter. The company reported a lower NIM of 3.4% for the reporting quarter. But higher loan sales, especially the retail loans, which rose to an eight-year high of 36%, thus offsetting the flat NIM, helped it book a 13% higher net interest income of Rs 4,639 crore.