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LIC Housing Finance has set a target of Rs 5,000 crore for wholesale or commercial lending for the current fiscal, said Mr V.K. Sharma, Director and Chief Executive.
During the February to March 2011 period, the housing finance company lent about Rs 300 crore to builders. In the December 2010 to January 2011 period, it had completely stopped project loans, after its former Director and Chief Executive got embroiled in a bribe-for-loans scandal.
“Now have re-started project loans as there is a lot of demand from builders,'' Mr Sharma said, while announcing the company's fourth quarter results.
During the quarter ended March 31, 2011, the company posted a net profit of Rs 315 crore, up 47 per cent from Rs 213 in the corresponding quarter last year. One of the reasons for the jump in profitability is the sale of the company's stake in LIC Mutual Fund to Nomura. The company's board has recommended a dividend of Rs 3.50 per share of Rs 2.
Disbursements in retail loans or loans to individuals grew by 71 per cent to Rs 6,461 crore (Rs 3,786 crore), during the quarter.
Sanctions increased by 37 per cent to Rs 5,578 crore (Rs 4,074 crore). Retail loans account for over 92 per cent of the LICHF's portfolio, Mr Sharma said. “Income from operations has gone up because of our strong portfolio and one-time profit from the sale of our stake in LIC MF to Nomura,'' Mr Sharma said.
LIC HF had a 39.3 per cent stake in LIC Mutual Fund of which it sold 19.3 per cent to Nomura for Rs 138 crore.
The total income from sale of investments was Rs 168 crore during the year.
The company was able to protect its margins as its portfolio of floating loans is more than fixed loans, due to which it could re-price the loans. Of the total assets, 54 per cent are floating, while 56 per cent of the liabilities are fixed. This helped to protect the margins.
For the full year, net profit increased by 47 per cent to Rs 974 crore (Rs 662 crore). Total loan sanctions increased by 25 per cent to Rs 22,603 crore and disbursements increased by 34 per cent to Rs 19,912 crore.
For the current year the company is targeting disbursements of Rs 18,000 crore, Mr Sharma added.
Shares of LIC HF closed at Rs 225.3, down 1.14 per cent, from the previous close of Rs 227.9, on the BSE, on Thursday.
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