Mortgage lender LIC Housing Finance (LICHF) on Wednesday announced a profit after tax (PAT) of Rs 213.49 crore, for the quarter ended December, 2010, up 39% year-on-year. A strong net interest margin of 3.14%, drove up the net interest income (NII) by 55% to Rs 352 crore. Sequentially, the nim rose 21 basis points.

V K Sharma, director and chief executive, LICHF, said ?Driven primarily by retail business, growth has been robust. Despite tight liquidity and rising cost of funds,we have raised funds at very competitive rates, thereby improving the NIMs over Q2.?

Sharma added that the firm had become extra cautious while giving project loans. ?Our project loan shares of the total loan book has come down to 10.5% from 11.4% in the September quarter, 2010. We are revising all sanctioned project loans and part- disbursed loans and and checking every supporting document.?

Sharma explained that the profit from sale of investments was due to the sale of a 19% stake in LIC Mutual Fund to the Japanese Financial services company, Nomura. LICHF now holds around 20% stake in LIC MF. ?We have generated Rs 137 crore through the sale,? he said.

LIC HF?s total income increased by 54% to Rs 1,354 crore while profits, from the sales of investments were Rs 137 crore. For the nine months ended December 31, 2010; the PAT rose 47% y-o-y to Rs 660 crore.

As on December 31, 2010, the company?s outstanding loan portfolio increased 36% y-o-y to Rs 46,380 crore. During three-month period, the company sanctioned loans worth Rs 5,785 crore and disbursed loans worth Rs 4626 crore, which was a rise of 28% y-o-y. Individual loan sanctions grew by 90% to Rs 5,302 crore and disbursals went up by 41% to Rs 4215 crore.

Loans to builders constitute 10.5% to Rs 4,856 crore out of total loan book. The gross non-performing assets on the builders? loan portfolio was at 0.08% as against the gross NPAs of 0.67% for the total loan book as on December 31, 2010.

In compliance with the latest National Housing Board (NHB) clarification regarding provisioning on standard assets, LICHF has made provisions of Rs 235 crore on loans disbursed under fixed cum floating rates. The shares of the company on Wednesday ended at Rs 170.35, up 9.61% on the NSE.