PNB Housing Finance witnesses sharp fall in customers opting for moratorium

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Published: June 18, 2020 10:40 PM

On March 27, the Reserve Bank of India (RBI) announced moratorium of repayment of term loans till May 31. It was later extended till August 31.

PNB Housing Finance, covid 19, lockdown, coronavirus lockdownThe housing finance company has not opted for moratorium from any of its lenders.

PNB Housing Finance on Thursday said it has seen a sharp decline in requests for moratorium from its customers, with its asset under management (AUM) under the scheme falling from 56 per cent in the March-May period to 31 per cent as of June 5.

The mortgage lender has given an opt-in route to accepting customers’ requests.

On March 27, the Reserve Bank of India (RBI) announced moratorium of repayment of term loans till May 31. It was later extended till August 31.

“As on June 5, 2020, under phase-1 (March-May), approximately 56 per cent of the company’s AUM have opted for moratorium, whereas under phase-2, approximately 31 per cent of the AUM have opted for moratorium indicating a sharp drop in customers requesting the moratorium,” the company’s Managing Director and CEO Neeraj Vyas said in a call with analysts post the fourth-quarter results.

Retail loans under moratorium in phase-1 accounted for 49 per cent of retail AUM, which reduced to 20 per cent in the second phase, representing over 50 per cent of the retail customers not opting for moratorium in phase-2.

“This reduction has been due to the proactive communication strategy adopted by the company,” he said.

As of March 31, 2020, its AUM stood at Rs 83,346 crore, with the share of retail loans being 82 per cent and corporate being 18 per cent.

The housing finance company has not opted for moratorium from any of its lenders.

“We did get an offer from a few banks, but we have taken a conscious call that at present, we will not avail the moratorium. We have sufficient liquidity to take care of our repayment obligations,” Vyas said.

The company has excess cash and liquid investments of roughly Rs 5,800 crore as on June 5 along with undrawn and sanction lines of Rs 4,500 crore.

In the quarter ended March 2020, the company reported a net loss of Rs 242.06 crore against a net profit of Rs 379.77 crore during the corresponding quarter last year, mainly due to higher provisioning amid the COVID-19 pandemic.

“Profit after tax de-grew by 163.7 per cent primarily on account of higher provisions, including COVID-19 provision of Rs 471 crore, resulting in the loss of Rs 242.1 crore from profit of Rs 379.7 crore,” it had said.

For the full year, the net profit dipped 45.8 per cent to Rs 646.2 crore from Rs 1,191.5 crore in 2018-19.

The asset quality deteriorated with the gross non-performing assets (NPAs) as on March 31, 2020, stood at 2.75 per cent compared with 0.48 per cent in the year-ago period.

Net NPAs of the company were at 1.75 per cent of the loan assets, as against 0.38 per cent.

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