PNB Housing Finance aims to cut operational expenses by 5-10%

The company plans to shut down eight branches in FY21.

By Ankur Mishra

In a bid to reduce operating expenditure by 5-10% in FY21, PNB Housing Finance plans to vacate its office at the Bandra-Kurla Complex (BKC) in Mumbai and rationalise branches in other cities. Neeraj Vyas, managing director and chief executive officer, told FE the BKC office was an ‘extended’ corporate office to meet clients. “Since we have taken a decision to focus on retail, and not corporate finance, we have decided that we will vacate it. It was a very high cost office for us.”

The company plans to shut down eight branches in FY21. It is planning to rationalise offices only in cities having more than one branches. “If we are shutting branches, it does not mean we are leaving the city,” Vyas said.

He said the company expects to disburse around Rs 13,000-crore loan in the current fiscal, and sees demand picking up in next two months. The company earlier reported a 9.6% year-on-year (y-o-y) decline in its consolidated net profit to Rs 257.2 crore due to six-year low disbursements amid Covid. Total disbursements in the June quarter stood at Rs 694 crore, 90% lower year-on-year.

The company is paying extra attention on recovery. “We have created a remedial management group in last one month, which is directly reporting to management without any kind of hierarchy,” Vyas said.

The company is also pinning hopes on the rights issue of Rs 1,500-1,700 crore in the current fiscal. “We are expecting a decision to be taken by PNB by next month,” Vyas said.

On strategy for FY21, Vyas said, “The company will continue its focus on recovery, liquidity, sell down of the corporate book, cost rationalisation and strengthening its balance sheet.”