LIC Housing Finance expects its loan portfolio to grow at 10-12% year-on-year(y-o-y) in the current financial year, managing director and chief executive officer Tribhuwan Adhikari said on Thursday.
“Last year, we went in for a major change in technology and restructuring. Because of these two changes, we faced a lot of challenges in technology. The first half of the year was way below our expectations due to these challenges,” he said, adding that the company came back on track in the March quarter.
The company’s outstanding loan portfolio rose a mere 4% y-o-y to Rs 2.9 trillion as on March 31, due to a 32% y-o-y drop in outstanding project loans. The project loan book fell to Rs 8,036 crore as on March 31 from Rs 11,738 crore a year ago.
“Our past has not been very good. Between 2016 and 2019, around 60-70% of our builder loans went bad and we are still carrying that burden. As a company, we are very cautious to not repeat the same mistake,” he said.
He said that high-rated builders seek loans at much lower interest rates. “While we need growth in the loan book, we also need margins. It will be a trade-off that we need to examine on a case-by case basis.” The company’s net interest margin improved to 3.15% in January-March from 2.93% a year ago.
LIC Housing Finance plans to disburse loans worth Rs 75,000 crore this fiscal. Disbursements in the project finance segment are expected to grow at 5-7% y-o-y.
The company is planning to increase its focus on the affordable finance segment, especially in tier-3 towns, and has opened 46 offices in these towns. It plans to increase the affordable mix to 20-25% in the next three-to-four years from 10-12% at present.