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Informist, Monday, Oct. 28, 2024

By Vaishali Tyagi

MUMBAI – LIC Housing Finance Ltd. will focus on expanding its wholesale lending portfolio as part of its growth strategy, Tribhuwan Adhikari, managing director and chief executive officer, said in a media call after the company had announced its financial results for the September quarter.

"Wholesale lending would be one area which we would be focusing on to grow our books," Adhikari said. "In quarter 2 (Jul-Sept), we have been able to disburse about INR 15 billion of project loan wholesale lending and this has increased from INR 5 billion disbursement in Apr-Jun, so there is an increase of around INR 10 billion in wholesale lending and the kind of proposals we have in the pipeline augurs wealth for the next two quarters."

Alongside wholesale lending, LIC Housing Finance will focus on boosting assets under management to increase net interest income, he said. The company has prioritised high-margin products to increase income. "Banks, because of their traditional low cost of funds, are able to compete on margins and offer products with competitive margins," Adhikari said. "So we need to slightly diversify from there and move into areas which give us high margins and one such segment is the affordable segment."

The housing finance company's net interest income for Jul-Sept fell 6% to INR 19.74 billion, from INR 21.07 billion in the corresponding period a year ago. The company's net interest margin for the quarter was at 2.71%, against 3.04% a year ago and 2.76% a quarter ago. The company's total loan portfolio grew only 6% on year to INR 2.95 trillion as of Sept. 30 against INR 2.78 trillion a year ago. Of these, individual home loans grew 7% on year to INR 2.51 trillion.

As part of this strategy, the housing financier recently introduced a new product within the affordable housing segment, the management said. "We have been there in the affordable segment, but we have been focusing on the salaried class," Adhikari said. "This year we are consciously moving into the self-employed segment of the affordable class."

He said LIC Housing Finance's asset quality is expected to improve in the coming quarters, with the company projecting substantial progress by Jan-Mar. Efforts to manage non-performing assets include a recently established settlement committee, active negotiations with borrowers, and increased monitoring of default-prone loans. On the National Stock Exchange, shares of LIC Housing Finance closed 3.4% higher Monday at INR 618.45.  End

Edited by Rajeev Pai

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