Quarterly Results Analysis: DHFL, GRUH Finance, YES Bank

Dewan Housing Finance Corporation

For Q2 of the current fiscal, Dewan Housing Finance Corporation (DHFL) posted a net interest income of Rs 228.6 crore in Q2FY14 against Rs 202.4 crore in Q2FY13, marking a growth of 13 per cent. Further, its non-interest income increased marginally by three per cent on a yearly basis to Rs 59.9 crore. During the quarter, the company posted a net profit of Rs 129.1 crore against that of Rs 106.5 crore in Q2FY13, a growth of 21 per cent on a yearly basis.

DHFL’s net interest margins for Q2FY14 stood at 2.70 per cent against 2.86 per cent in Q2FY13. It posted a return on equity of 17.01 per cent and 1.60 per cent return on assets during the same period. The Capital Adequacy Ratio for the company stood at 18.01 per cent as of September 30, 2013, of which the Tier I CAR was at 12.36 per cent. 

DHFL’s loan portfolio stood at Rs 35800 crore as of September 30, 2013. The loans sanctioned by the company stood at Rs 4414.3 crore for the quarter against a sanction of Rs 4781.4 crore in the first quarter of the current fiscal, a negative growth of eight per cent. Further, it disbursed loans worth Rs 3258.9 crore during the reported quarter, which marks a dip of 10 per cent on a sequential basis. 

On a half yearly basis, the company’s total income was up 15 per cent YoY to Rs 2293.9 crore against Rs 1987 crore in H1FY13. The Profit After Tax for H1FY14 was up 23 per cent on a yearly basis to Rs 249.4 crore against Rs 203 crore in H1FY13. For the first half of the financial year 2014, the company sanctioned Rs 9195.7 crore against Rs 7927.1 crore in H1FY13 and disbursed Rs 6874.1 crore in H1FY14 against Rs 6185.8 crore in H1FY13.

GRUH Finance

GRUH Finance, a subsidiary of HDFC, posted a Profit After Tax of Rs 68.12 crore for the second quarter ended September 30, 2013 as compared to Rs 53.93 crore for the corresponding period in the previous year, an increase of 26 per cent. The company’s net interest income rose by 27.08 per cent to Rs 124.87 crore during the reported period against Rs 98.26 crore in Q2FY13. The non-interest income of GRUH Finance showed a growth of 23.79 per cent on a yearly basis to Rs 29.20 crore during Q2FY14. In the said period, its net profit increased by 26.32 per cent on a yearly basis to Rs 68.12 crore. 

The company’s loan portfolio amounted to Rs 6142.90 crore as on September 30, 2013, up 32 per cent from that of Rs 4661.31 crore in the previous year. Further, the loan disbursements during Q2FY14 were at Rs 1197.15 crore as against Rs 959.96 crore in Q2FY13, indicating a growth of 25 per cent. The cumulative loan disbursements as of September 30, 2013 were Rs 10713.93 crore. 

The Gross NPAs of the company stood at Rs 24.93 crore or 0.41 per cent (of the total loan outstanding portfolio) during the reported period. The company is required to carry a provision for the balance sheet on its NPA portfolio as per the guidelines of the National Housing Bank. As a result, its Net NPAs in the September 2013 quarter stood at zero.

GRUH Finance’s deposit portfolio has increased to Rs 834.11 crore in Q2FY14, up 44 per cent from Rs 579.01 crore as of September 2012. The company’s Fixed Deposit programme is rated by CRISIL and ICRA. The “AAA” rating indicates that the degree of safety of repayment and principal is very high. Its Capital Adequacy Ratio (CAR) as on September 30, 2013 is 17 per cent, of which the Tier I CAR is 15.26 per cent and Tier II is 1.74 per cent. 

GRUH has a network of 136 retail offices across seven states of the country, including 40 offices in Gujarat, 41 in Maharashtra, 14 in Karnataka, 19 in Madhya Pradesh, 10 in Rajasthan, seven in Chhattisgarh and five in Tamil Nadu.

YES Bank

In its results for the second quarter of FY14, YES Bank has reported a Net Interest Income (NII) of Rs 672.1 crore, up 28.2 per cent from Rs 524.2 crore in Q2FY13. The net interest income margin for the quarter stood at 2.9 per cent, the same as in Q2FY13. Further, the bank’s non-interest income grew by 61.2 per cent on a yearly basis to Rs 446.1 crore for Q2FY14 from Rs 276.8 crore in the previous year corresponding quarter. 

Driven by growth in the NII and Non-Interest Income, YES Bank’s operating profit for the said period was up by as much as 47.1 per cent to Rs 712.9 crore against Rs 484.7 crore in Q2FY13. Further, its net profit was at Rs 371.1 crore, up 21.3 per cent from Rs 306.1 crore in Q2FY13. The bank delivered a return on equity of 23.1 per cent and return on assets of 1.5 per cent for the quarter.

On the balance sheet front, the total advances grew by 13.6 per cent to Rs 47717.2 crore as on September 30, 2013. Its total loans portfolio included Corporate & Institutional Banking (large corporates) with a share of 67.1 per cent, Commercial Banking (mid-sized corporates) at 15.7 per cent, and Retail Banking (including MSMEs) at 17.2 per cent. The bank’s credit deposit ratio stood at 70.6 per cent as of September 30, 2013. The Current and Savings Account (CASA) deposits grew by 52.5 per cent on a yearly basis to Rs 13776 crore, taking the CASA ratio to 20.4 per cent. 

Its Gross Non-Performing Advances (Gross NPAs) as a proportion of the Gross Advances was at 0.28 per cent, while the Net Non-Performing Advances (Net NPAs) as a proportion of Net Advances was at 0.04 per cent as of September 2013. The Gross NPAs and Net NPAs were at 0.22 and 0.03 per cent respectively as of June 30, 2013. The bank’s provisions & contingencies increased by a staggering 347 per cent on a sequential basis to Rs 179.1 crore in the quarter from Rs 61.7 crore in Q1FY14. 

YES Bank successfully raised USD 255 million (USD 180 million and EUR 58 million) by way of the dual currency, multi-tenure syndicated foreign currency loan facility and availed the RBI’s swap facility. 

As regards expansion, the bank added 25 branches and 71 ATMs as on September 30, 2013. Its total network now stands at 500 branches and 1122 ATMs.