OREANDA-NEWS. The Board of Directors of Housing Development Finance Corporation Limited (HDFC) announced its unaudited consolidated financial results for the third quarter of the financial year 2014-2015, following its meeting on Saturday, February 14, 2015 in Mumbai. The accounts have been subject to a limited review by the Corporation's statutory auditors in line with the regulatory guidelines.

CONSOLIDATED FINANCIAL RESULTS

For the nine months ended December 31, 2014, the consolidated profit after tax stood at 6,116.27 crore as compared to 5,533.12 crore in the corresponding period in the previous year - an increase of 11%.

Housing Finance Companies create a Special Reserve through appropriation of profits in order to avail tax deduction under Section 36 (1)(viii) of the Income Tax Act, 1961. In May 2014, the National Housing Bank had advised Housing Finance Companies to create a Deferred Tax Liability (DTL) on the amount transferred to the Special Reserve as a matter of prudence.

Accordingly, the deferred tax liability on the Special Reserve for the nine months ended December 31, 2014 amounting to 259 crore has been charged to the Statement of Profit and Loss in determining the aforesaid consolidated profits.

The consolidated profit after tax for the nine months ended December 31, 2014 does not consider the charge in respect of the redemption premium on Zero Coupon Debentures amounting to 307.12 crore (net of tax) (k 268.42 crore for the nine months ended December 31, 2013}.

Had the aforesaid been considered, the adjusted profit after tax for the nine months ended December 31, 2014 would have been 5,809.15 crore compared to 5,264.70 crore.

The adjusted profit after tax after considering the charge in respect of the redemption of premium on Zero Coupon Debentures but prior to considering the impact of DTL on the Special Reserve would have been 6,068.15 crore compared to 5,264.70 crore, representing a growth of 15%.

The share of profit from subsidiary and associate companies in the consolidated profit after tax was 33% for the year ended December 31, 2014.

KEY SUBSIDIARIES

HDFC Standard Life Insurance Company Limited (HDFC Life)

For the nine months ended December 31, 2014, New Business Premium, including group premium stood at 3,438 crore compared to 2,524 crore, representing a growth of 36%.

For the nine months ended December 31, 2014, the Indian GAAP profits stood at 574.60 crore compared to 531.96 crore.

In terms of market share amongst private sector players, the company ranked first in group premium and third in individual business for the nine months ended December 31, 2014.

Sale of Shares of HDFC Life

The Corporation had agreed to sell up to 1,89,51,361 equity shares of 10 each of HDFC Life to Azim Premji Trust at a price of Rs. 105 per share. This represented 0.95% of the total issued and paid-up equity capital of HDFC Life. During the quarter ended December 31, 2014, the Corporation sold 0.60% of the capital of HDFC Life and the balance shares were sold in January 2015. This sale of equity shares was based on a company valuation of 20,946 crore.

HDFC Asset Management Company Limited

HDFC Mutual Fund manages 53 schemes comprising debt, equity, gold exchange traded funds and fund of fund schemes.

The average assets under management for the month of December 2014 stood at 1.57 trillion, which is inclusive of assets under discretionary portfolio management and advisory services.

In terms of assets under management, HDFC Mutual Fund is the largest in the industry. HDFC Ergo General Insurance Company Limited

The gross written premium for the nine months ended December 31, 2014 stood at 2,387 crore compared to 2,157 crore, representing a growth of 11%.

The profit after tax for the nine months ended December 31, 2014 stood at 59.37 crore.

The solvency ratio stood at 160% as against a regulatory requirement of 150%.

The company had a market share of 8.5% amongst private sector players and an overall market share of 4% in terms of gross direct premium for the nine months ended December 31, 2014.

STANDALONE RESULTS

The unaudited standalone financial results of HDFC Limited for the nine months ended December 31, 2014 were earlier approved by the board at its meeting held on January 29, 2015.

Key highlights of the standalone financial results were:

• The profit after tax excluding the impact of DTL on the Special Reserve stood at 4,372.71 crore as compared to 3,717.14 crore in the corresponding period of the previous year, representing a growth of 18%. After providing 245 crore for the DTL on the Special Reserve, the profit after tax for the nine months ended December 31, 2014 stood at 4,127.71 crore.

• As at December 31, 2014, the loan book stood at 2,19,951 crore as against 1,92,284 crore as at December 31, 2013. Loans sold in the preceding twelve months amounted to 8,566 crore.

• The individual loan book and the overall loan book grew by 23% and 19% respectively (after adding back the loans sold in the preceding 12 months).

• 85% of the incremental growth in the loan book during the nine months ended December 31, 2014 came from individual loans.

• The net interest margin for the nine months ended December 31, 2014 stood at 3.93% and the spread on loans stood at 2.31%.

• Gross non-performing loans reduced to 0.69% of the loan portfolio as at December 31, 2014 compared to 0.77% in the previous year.