The Hindu Business Line : LIC Housing Finance Q1 net rises 124%

Mumbai, July 21 Buoyed by higher growth in business and lower provisions, LIC Housing Finance Ltd has reported a 124 per cent increase in net profit in the first quarter of 2008-09 at Rs 104.66 crore, against Rs 46.69 crore in the corresponding quarter of the previous year.

Mr R.R. Nair, Chief Executive, said that strong growth in disbursements, efficient liability management and lower provisions on NPAs had helped the company in seeing a huge jump in net profit.

“The NPAs in this quarter have reduced by Rs 230 crore compared with last year. Hence, the provisions for NPAs have dropped by Rs 25 crore,” Mr Nair said.

While gross NPAs at the end of June 2008 stood reduced at 2.22 per cent (4.06 per cent), net NPAs fell to 1.15 per cent (2.58 per cent).

Provisions and write offs dropped to Rs 9.67 crore in the first quarter of the fiscal 2008-09, against Rs 34.55 crore in the previous fiscal.

The company has seen a 24 per cent growth in loan disbursements at Rs 1,520 crore, against Rs 1,222 crore in the previous year. Loan sanctions jumped by 55 per cent to Rs 1,787 crore (Rs 1,150 crore).

Net interest margin of the company slightly improved to 2.7 per cent, against 2.3 per cent at the end of June, 2007. Cost of funds increased to 8.93 per cent (8.63 per cent).Total income of the company jumped 35 per cent to Rs 622 crore (Rs 461 crore) and interest income rose 34 per cent to Rs 593 crore (Rs 442 crore).

Other income also jumped to Rs 16.6 crore, from Rs 8.9 crore during the same period.

The outstanding mortgage portfolio as on June 30, stood at Rs 22,757 crore, 25 per cent higher than Rs 18,185 crore in the previous year.

The company’s capital adequacy stands higher at 15 per cent at the end of the first quarter, against 13 per cent.

Mr Nair said that the company’s parent, Life Insurance Corporation, had pumped in Rs 500 crore through tier II capital on July 1, 2008.

The housing finance company expects to see higher growth this year. “The first quarter is usually lean. But we expect to end the year with a 40 per cent growth in disbursements,” Mr Nair said.

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