LIC Housing Finance profit flat at Rs 597 crore, provisions rise

LIC Housing Finance (LICHFL) on Thursday reported a flat growth in its net profit for the December quarter, hit by a 66.2% rise in provisions. The housing financier reported a 0.2% year-on-year (y-o-y) growth in net profit on a standalone basis to Rs 567.53 crore. Total disbursements reported a tepid y-o-y growth of 3.12% during the quarter to Rs13,177 crore.

Provisions for expected credit loss soared to Rs2,584.72 crore during the December quarter, compared with Rs1,555.63 crore a year ago. Exposure to Stage 3 assets, or loans overdue for more than 90 days, increased 35 bps sequentially to 2.73%. Finance cost of the company rose by 11.5% y-o-y to Rs3,713.8 crore.

Chief executive officer and managing director Siddartha Mohanty told FE said that the non-performing assets (NPAs) in the developer loans segment had reduced compared to Q2. Fresh slippages in Q3 stood at around Rs600 crore, he added.

“In the current year, we have been very selective in lending to developers. In fact, there has been a degrowth in disbursements of 57% to developers. However, we are encouraging developers working in the affordable housing segment,” he said.

Mohanty said that among various appraisal parameters for developers, LICHFL was also focusing on the sales velocity of the units to assess their ability to repay. The company’s net interest income grew 18% y-o-y during the December quarter to Rs1,228 crore, while net interest margin grew nine basis points (bps) y-o-y to 2.42%.

LIC Housing Finance’s loan portfolio grew 13.3% to Rs2.06 lakh crore. Disbursal of individual home loans grew 16.2% y-o-y to Rs10,655 crore, while project loan disbursals shrunk 24.8% annually to Rs931 crore. Total income of the company was up 12.5% at Rs4,996.45 crore.

He said that various government initiatives, along with its LIC 2020 Home Loan offer would drive growth in the upcoming quarters. The scheme allows a principal repayment holiday of 48 months for under-construction properties,while for ready-to-move houses, six EMI waivers are given, he added. On a consolidated basis, the LIC Housing’s net profit fell marginally to Rs602.10 crore.

Source: Financial Express