LIC Housing Finance net rises 2.3% to Rs 790 crore in September quarter

Mortgage lender LIC Housing Finance on Wednesday reported a 2.3% year-on-year (y-o-y) growth in its net profit to Rs 790 crore for the September quarter on the back of strong collection efficiency and improved disbursements. Total provisions declined 63% y-o-y, but increased 82% sequentially to Rs 103.2 crore. The net interest income (NII) stood flat, both sequentially and y-o-y at Rs 1,238 crore. The collection efficiency for the month of September 2020 stood at 96%.

Siddhartha Mohanty, managing director (MD) and CEO, LIC Housing Finance, said, “With the gradual unlocking of the economy, we have witnessed a significant pickup in business activities across the country, with re-emergence of demand, which is demonstrated in the pickup of the disbursements in the second quarter (Q2), which has helped us reach pre-Covid levels of activities.”

“With the ongoing festive season showing buoyancy, we are confident of further improvement in business volumes in the coming quarters,” he added.

Total disbursements increased 2.2% y-o-y to Rs 12,443 crore. Home loan disbursements stood at Rs 10,373 crore, up 2.3% y-o-y. Disbursements recorded a gradual increase in each of the months in the second quarter, especially in September 2020, which recorded a 22% y-o-y growth in the individual home loan segment.

The total loan portfolio grew 5% y-o-y to Rs 2.03 lakh crore. The lender’s total income remained flat at Rs 4,981 crore, as against Rs 4,979 crore during the same quarter last year. The housing finance company expects debt restructuring requests from the borrowers to remain around 3-3.5% of the loan book. The Reserve Bank of India (RBI) had allowed debt restructuring of personal and corporate loans impacted by Covid-19.

The asset quality of the lender improved sequentially. Gross stage 3 loans stood at 2.79%, down 4 basis points (bps), compared to 2.83% in the previous quarter. The provisioning coverage ratio (PCR) stood at 47%, as against 45.34% in the previous quarter.

The net interest margin (NIM) declined 9 basis points (bps) y-o-y, but remained flat sequentially at 2.34%. The weighted average cost of funds have declined 75 bps y-o-y to 7.61% in the first half of the financial year 2021, compared to 8.36% in the same period last year.