22.64% HDFC shareholders vote against Parekh

Mumbai: Nearly a quarter of the shareholders of HDFC Ltd voted against the continuance of chairman Deepak Parekh as director in a dramatic shareholders’ meet in Mumbai on Monday. Parekh, a doyen of the financial services industry and one of the longest serving chairmen of HDFC, got 22.64 per cent negative votes and 77.36 per cent votes in his favour.Other directors like MD Keki Mistry and director JJ Irani got more positive votes.It is believed that a major foreign fund was not happy with Parekh and is expected to have voted against his re-appointment. Foreign institutional investors own over 72 per cent in the mortgage lending company. Large investors of HDFC include Aberdeen Asset Management, Oppenheimer Funds and GIC Singapore. The number of members who voted in favour of the resolution was 2,907, which comprised 77.36 per cent of the total votes cast. However, 572 members, comprising 22.64 per cent of the votes cast, voted against Parekh’s reappointment as a director of the corporation.A local proxy advisory firm is believed to have asked shareholders to vote against Parekh’s reappointment, too. Parekh has been at the helm of HDFC for close to three decades. Under his leadership HDFC has emerged as the largest and most stable mortgage lender in the country. The company expanded into newer segments across bank, life and general insurance, asset management, affordable housing and education loans under him.The country’s largest mortgage lender reported a 53.8 per cent growth in net profit in the first quarter ended June, aided by dividend from HDFC Bank and strong loan growth.India’s largest mortgage lender Housing Development Finance Corp. (HDFC), reported a 53.8 per cent growth in net profit in the first quarter ended June, aided by dividend from HDFC Bank and strong loan growth.HDFC reported a net profit of Rs 2,190 crore versus Rs 1,424 crore in the year-ago quarter after HDFC Bank paid a dividend of Rs 511 crore. It did not pay any dividend in the year-ago period.“The spurt in profit is because of HDFC Bank paying dividend in the first quarter, which was paid in the second quarter during the last financial year,” said chairman Deepak Parekh at the annual general meeting.On AUM basis, individual loan book grew 18 per cent while corporate loans grew 17 per cent. The total loan book was up 18 per cent at Rs 3.71 lakh crore over the last year.Commenting on the affordable housing segment, Parekh said that there is focus on lending to this segment. On an average HDFC has been approving close to 8,300 loans every month to the economically weaker section and the LIG segment, with monthly such average approvals at approximately Rs 1,346 crore.“The much-awaited momentum in the individual segment has started building up,” said Digant Haria, analyst at Antique Broking. “This is additional help from high double-digit growth witnessed in the EWS & LIG segments. Margins were stable while asset quality posted margins improvement. Adjusted for dividend from HDFC Bank, earnings would have grown around 25 per cent.”Although HDFC’s revenue and net profits were in line with the street expectations, net interest income (NII) was a bit lower. Asset quality also deteriorated, albeit marginally. While the numbers do not hint at any positive near-term outlook, recognition of profits from its several investments which did not show in the June quarter will reflect on its balance sheet in the September quarter, thanks to the new accounting standards.These profits will directly be routed to the balance sheet, thus improving the net-worth of the non-banking financial company and the largest mortgage player in the country. HDFC moved to Ind AS, and under the new accounting standards, asset classification and provisioning is done on the expected credit loss model of providing for expected future credit losses. 65197915 65196712 65201619

from The Economic Times https://ift.tt/2AtcAU0