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Don't see any stress in retail loans in coming qtrs: HDFC
11 Jul 2012, 09:57 PM
Saikat Das

India's largest mortgage lender Housing Development Finance Corporation (HDFC) on Tuesday met the market expectation in its first quarter (April-June) results. However, HDFC shares were nearly 1% down to close the day at Rs 677 on profit booking. Despite posting significant growth in its loan book, a section of market participants is a bit apprehensive of the retail asset quality in the coming quarters as the bug of economic slowdown continues to bite.

In a brief telephonic interview with the lender's vice-chairman and CEO - Keki Mistry sounded confident of its retail home loan portfolio and did not predict any asset quality stress, going forward.

Below is the edited excerpt of the interview:

Q: What was the key driver for HDFC's Q1 results?

A: A strong loan book growth coupled with a better asset quality added to our net profit. The non-performing asset ratios have improved year-on-year basis. However, the NPAs fell slightly quarter-on-quarter basis. You cannot compare the NPA levels sequentially. In March (Jan-March), NPAs hit historical low level. If you compare NPAs y-o-y basis, we have improved our asset quality n the last 30 consecutive quarters.

Q: What is your outlook for loan growth in FY13?

A: As I said earlier, our book would grow at 18-20%. The outlook for credit growth remains unchanged. Nothing has happened in the first quarter that would prompt us to change the outlook. In the last year too (FY12), we projected the same loan growth but we ended the year at 23%. We have always been above the industry average.

Also read: HDFC Q1 net profit up 19% on strong loan growth

Q. With the economic slowdown hitting hard, do you foresee any stress coming from your retail assets?

A: I do not see any stress on our retail portfolio. The consumer behavior so far is very good. Our retail customers continue to repay their loans timely.

Q. During the quarter, retail loans showed
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