PNB Housing Finance plans to restart its corporate book in a small way. Four years ago, the company used to have around Rs 18,000 crore of corporate book but due to stress build up in the book, they stopped doing business, and worked on bringing down the book.
As on September 30, the corporate book stands at Rs 1,531 crore. In the next financial year, the company is also planning to launch another vertical, Girish Kousgi, managing director and CEO at PNB Housing Finance told Financial Express.
He added that the Pradhan Mantri Aawas Yojana’s interest subsidy scheme was the sole driver of robust demand for affordable housing, with customers ranging from metro cities to tier 4 cities. This comes at the time when the consumption is witnessing a downward trajectory in the economy.
Given strong demand for affordable housing, he expects the industry to grow 13-14%. For the company, he expects to breach the target of 17% as the firm has already achieved the growth rate of 16.2% in the quarter ended September.
On the asset quality side, he said that majority of their personal loan book is secured, and hence the stress is limited. “Slippages are coming down. Collections are going up and recovery is going up. That is why you will see negative rate cost. So in quarter one, it was negative. In Q2, it was negative. Right. So this trend for us will continue. So we are not seeing any stress,” he said.
The demand for affordable housing will spur more once the Reserve Bank of India cuts the policy rate. However, it may affect the margins adversely, he added. At the same time, he said that due to three reasons, the impact of rate cuts on their margin will be minimal.
He highlighted that due to lag effect, the loans will get re-priced, there is further room to bring down the cost of borrowing, and with increasing contribution from affordable and emerging housing segment, which comes at a higher yield, the margins will be protected.
On plans of raising capital, he told that there are no future plans for next four years to raise capital as the company is adequately capitalised. As far as co-lending business is concerned, the company is not considering this option as it is interested in growing its own book, Kousgi told.
Owing to small portion of top-up on housing loans and strong underwriting mechanism, the stress is minimal on the front, he added.
On October 24, the company reported a jump of 23% in its net profit to Rs 470 crore year-on-year basis. The gross non-performing asset ratio has improved to 1.24% as on September 30. the net NPA also improved to 0.84% on yearly basis.
Retail disbursements grew by 28% on year to Rs 5,341 crore. Of this, affordable and emerging markets accounted for 31%. Healthy growth in assets under management also aided its bottom line. AUM recorded a growth of 11% on year and 3% on quarter to Rs 74,724 crore.
From: financialexpress
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