LIC Housing Finance Q4 profit plunges 39%

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Published: June 20, 2020 9:03 AM

There was a deterioration in asset quality, with the gross stage 3 ratio rising to 2.83% in Q4FY20 from 1.58% in Q4FY19. The company stepped up provisioning for bad loans, which rose 71% y-o-y to Rs 2,612 crore.

LIC Housing Finance, Lic housing finance profit, lic housing finance financial statement, lic housing finance financialsThe individual loan portfolio stood at Rs 1.96 lakh crore as on March 31.

LIC Housing Finance reported a 39% year-on-year (y-o-y) drop in net profit during the March quarter to Rs 421.43 crore on the back of a steep fall in income and disbursements.

The lender’s net interest income (NII) — the difference between interest earned and expended — fell 9% to Rs 1,089 crore and other income slid 32% to Rs 34.52 crore.

Total disbursements declined 34% to Rs 11,325 crore, with project loans taking a larger knock to record an 80% y-o-y drop to Rs 413 crore. Disbursements to individuals fell 28% to Rs 10,912 crore. The company’s net interest margin (NIM), a key measure of profitability, shrank to 2.1% in Q4FY20 from 2.56% a year ago.

The individual loan portfolio stood at Rs 1.96 lakh crore as on March 31, against Rs 1.81 lakh crore, a growth of 8%. The project loan portfolio stood at Rs 14,237 crore as on March 31, against Rs 13,077 crore a year ago. The total outstanding portfolio grew 8% y-o-y to Rs 2.1 lakh crore.

The company’s operations were restricted during the first lockdown from March 24 to April 19, during which measures to work from home were put in place, the company said in a statement. “The Company has been able to open almost all the branches as of now. The first lockdown restricted disbursements during April 2020. Operations at most branches have resumed since May 2020 and necessary safety measures have been taken,” LIC Housing said, adding that it has managed to stay in touch with its customers through the mobile app ‘Homy’. The app was launched in mid-February.

There was a deterioration in asset quality, with the gross stage 3 ratio rising to 2.83% in Q4FY20 from 1.58% in Q4FY19. The company stepped up provisioning for bad loans, which rose 71% y-o-y to Rs 2,612 crore.

Siddhartha Mohanty, MD & CEO, LIC Housing Finance, said that the company is focusing on maintaining asset quality and restarting disbursements and transitioning to a more technology-driven business process. “Despite the adverse situation, we are comfortably placed in terms of liquidity. We expect the overall outlook for the economy and housing finance segment to improve in another two-three quarters,” he said.

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