HDFC Q1 net rises 5%, limited by rising benchmark rates
The Hindu
NII grows 8%, would have been higher but for ‘transmission lag’, says Mistry
Mortgage major HDFC on Friday reported a 4.95% growth in consolidated June quarter net profit at ₹5,574 crore, limited by the impact of the interest rate hikes on its core income.
On a standalone basis, the largest pure-play mortgage lender in the country reported a 22% increase in net profit to ₹3,669 crore for the quarter, which was a shade below the street estimates of growth in the high-20s.
Total income on standalone basis rose to ₹13,248.73 crore from ₹11,663.14 crore a year earlier.
Core net interest income (NII) rose 8% to ₹4,447 crore, which was one of the major reasons for the lower profit growth.
The company's vice-chairman and chief executive Keki Mistry explained that loan demand had been robust with the overall assets growing by 16%, but that the NII was impacted by rate increases which take time to be passed on to borrowers.
If not for this "transmission lag", the NII would have been 16% higher, Mr. Mistry said, adding that it expected NII growth to accelerate from here and normalise during the course of the fiscal year.
There was a narrowing in the net interest margin to 3.4%, and Mr. Mistry said the elevated levels of the year-earlier period were not sustainable.
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