The operating income rose by 40 per cent to Rs 4,077 crore.

Healthy loan growth boosted Housing Development and Finance Corporation’s (HDFC) net profit by 20 per cent to Rs 970.6 crore during the quarter ended September 30. The country’s biggest mortgage lender’s profit stood at Rs 807.5 crore during the same period last year.

The mortgage financier’s loan book grew 24 per cent in the second quarter which stood at Rs 1,26,992 crore, including loan sold to the tune of Rs 4,989 crore. Excluding the loans sold, growth was 19 per cent during the period under review.

“Low housing penetration and demand from middle-income consumers with improved salaries aspiring to own a house helped the lender buck the trend and clock strong loan growth," said Keki Mistry, vice-chairman and chief executive officer, HDFC. However, demand from large cities has slowed, Mistry added.

Spreads remained steady for the second quarter at 2.28 per cent, while for the six-month period, the figure was 2.29 per cent. “Operating performance remains strong with healthy loan growth, stable spreads and sound asset quality. While core was in line, higher-than-expected trading gains explained why actual net profit was above our estimate," said Standard Chartered Securities in a research note while commenting on the earnings.

The operational income rose by 40 per cent to Rs 4,077 crore in the second quarter this year as against Rs 2,906.5 crore in the same quarter in 2010. Trading gains during the reporting period was higher at Rs 87 crore as compared to Rs 59 crore during the same period of the previous financial year.

The mortgage lender’s provisioning requirement went up following the revised norms of the National Housing Bank (NHB). It has made a provision of Rs 1,196 crore as provisioning requirement for dual loan housing scheme and for standard advances was increased by NHB. In addition, Rs 255 crore was drawn from the additional reserves towards provisioning, which had no bearing on the profit and loss account.

The corporation’s asset quality improved as gross net profit assets stood at 0.82 per cent for the second quarter of 2011 as against 0.86 per cent during the same period last year.