Financial Daily from THE HINDU group of publications
Tuesday, Feb 21, 2006
Financial Daily from THE HINDU group of publications Tuesday, Feb 21, 2006 |
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Money & Banking
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Housing Finance LIC Housing Finance sees 35% rise in net profit Our Bureau
Mr S.K. Mitter, CEO, LIC Housing Finance Limited, at a press conference in Chennai on Monday. - - Bijoy Ghosh
Chennai , Feb. 20 LIC Housing Finance Ltd expects to end the fiscal with a net profit of about Rs 200 crore, or about 35 per cent over the last fiscal, the company's Director and Chief Executive, Mr S. K. Mitter, said here on Monday. LIC Housing made a net profit of Rs 143.72 crore for 2004-05 and Rs 167 crore in the first nine months of the current year. Mr Mitter told newspersons that the company's loan book would grow to about Rs 16,000 crore this fiscal compared to Rs 13,000 crore last fiscal and Rs 14,193 crore in the first three quarters of 2005-06. With the cost of funds at 7 per cent and the average yield at 8.7 per cent, LIC Housing operates on a thin spread of 1.7 per cent. As much as 37 per cent of its funding requirements are met with borrowings from banks. Mr Mitter agreed that banks are in a relatively advantageous position as far as pricing of housing loans is concerned, but said that LIC Housing has the expertise that many banks lack. He noted that many banks had closed down their home loan subsidiaries. He hoped that "risk weights" on home loans for computing capital adequacy would be restored to 50 per cent from 75 per cent now. LIC Housing Finance has 115 branches across the country apart from a fleet of direct selling agents. In future, the company would tie up with NGOs and other social organisations for the distribution of its loan products, Mr Mitter said. He, however, added that the LIC Housing's experience with low-ticket size loans had not been good.
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