On 30 July 2018 HDFC, a mortgage lender, released its first quarter financial results. Given below are the highlights from the press release statement.
- Revenue from operation increased by a good ₹1623.87 cr. This is the income from normal business activity on a daily basis. These include interest payments received on loans, other interests (investment made elsewhere), fair value of investments (selling price of investments) and interest on other charges (that HDFC pays).
- Bank spread for individuals increased by 0.01% while for non individuals it decreased by 0.04%. Bank spread is the money received by the bank to the money paid out by the bank (loans in this case). This depicts the business activity of the company.
- Net interest margin grew by 0.01%. Net interest margin is the interest received (from loans) minus the interest paid (on bonds/deposits/loans the banks take). This is a fairly good number.
- Earnings per share (EPS) grew by 4%. EPS is the profits earned (after dividend payments) divided by the total number of shares. This parameter defines the profitability and HDFC is at a good number.
- Capital adequacy ratio increased by 1.6%. This is the ratio of total capital to the risk weighted assets ( weights according to the risk of a particular asset). An increased ratio implies that HDFC is less likely to become insolvent in times of unexpected losses. Capital adequacy ratio must be at 8% at least and it is 16.3% for HDFC.
- Non performing loans increased by 0.06%. For individuals non performing loans increased by 0.01% and for non individuals it increased by 0.23%.