LIC Housing Finance net profit up 34% on reduced provisions

The net interest margin (NIM) stood at 2.32%, down 9 basis points (bps) compared to the same quarter last year.

LIC Housing Finance reported a 34% year-on-year (Y-o-Y) growth in its net profit to Rs 817 crore for the June quarter on the back of reduced provisions and steady income. Total provisions declined 77.69% to Rs 56.5 crore, compared with Rs 253 crore in the same period a year ago.

The net interest income — the difference between interest earned and expended — stood at Rs 1,221 crore, up 3.3% against Rs 1,182 crore in the year-ago period. Loans under moratorium remained at 25% of the total loan book during the latest quarter.

Siddhartha Mohanty, MD and CEO, told FE that the lender expects lesser number of borrowers to opt for restructuring of loans. The Reserve Bank of India (RBI) had earlier permitted resolution of personal and corporate loans with strict barriers.

“The loans under moratorium remained at the same level during phase 1 at 25%. We expect loans under restructuring to be lesser than that,” he said. We are still evaluating broad contours of our policy on restructuring of personal loans, Mohanty said.

The asset quality of the lender improved sequentially. Gross stage 3 loans stood at 2.83%, down 3 basis points (bps), compared to 2.86% in the previous quarter. The net interest margin (NIM) stood at 2.32%, down 9 basis points (bps) compared to the same quarter last year.

Total disbursements declined to Rs 3,560 crore in the quarter under review, against Rs 10,261 crore in the same quarter last year. However, the company has of late seen some improvement in disbursements. For the month of June, retail disbursements picked up to 62% of the corresponding figure of the previous year.

The total loan portfolio stood at Rs 2,09,817 crore, against Rs 1,97,768 crore, a Y-o-Y growth of 6%. The individual loan portfolio was at Rs 1,95,176 crore, compared with Rs 1,84,155 crore, showcasing a Y-o-Y rise of 6 %. Out of that, the home loan portfolio registered a growth of 6.4 %. The developer loan portfolio stood at Rs 14,641 crore as on June 30, 2020, compared with Rs 13,614 crore as on June 30, 2019.