The Hindu Business Line : LIC Housing loans to get costlier by 50 bps from Friday

The company, which hopes to relieve the stress on spreads with this rate hike, plans to fall in line with the rising trend that has been dominating the housing finance sector in recent times.

LIC HF, which commands roughly 7 per cent of the housing loan market, is eyeing a 24-25 per cent growth in business and a 35 per cent-plus growth in profits in the current fiscal, said Mr S.K. Mitter, Chief Executive, LIC HF. The company's mortgage loan book now stands at over Rs 14,000 crore.

"We have recorded a compounded annual growth rate (CAGR) of over 30 per cent in disbursals over the past five years. This trend is expected to continue. The current year's disbursals, till December 2005, are at Rs 3,470 crores," he told newspersons on Wednesday.

LIC HF further plans to reduce NPAs, which at roughly 4.7 per cent (gross) are "still on the higher side". While an active recovery programme is under way, the company hopes to bring its net NPA down further to 2 per cent.

The coming months will see LIC HF focus on its retail business, especially through its newly-introduced product - New Griha Laxmi. This allows loans against financial assets such as bank FDs and NSCs; no guarantors or other securities are required.

Mr Mitter said LIC HF plans to scale up its international business, courtesy a growing market in the West Asia. Last year, it did about Rs 40 crore internationally, a figure that is expected to increase this fiscal. In future, special efforts will be made to tap the NRI segment, he hinted.

At the moment, there is no scope for LIC, the parent body with 39.1 per cent holding, to dilute its stake further. LIC HF, which currently has a paid-up equity base of Rs 85 crore, went public over a decade ago, it is pointed out.

At another level, the company (through its 100 per cent subsidiary) has sought 10 acres from the West Bengal Government to start a `Assisted Living Community Centre' in the State.

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