LIC Hsg loan sanctions grow 51% in April-June

16-Jul-2010

Quarterly profit jumps 71% to Rs 212.02 crore

LIC Housing Finance has recorded a growth of 51% in loan sanctions to Rs 5,348 crore and 40% in loan disbursements to Rs 3,392 crore during the first quarter ended June 2010. "About 60% of the loans were for purchase of new homes and about 25% for existing homes," RR Nair, director and chief executive officer, LIC Housing Finance told DNA Money. The company expects to sustain growth in disbursements for the rest of the fiscal.

Residential real estate prices in Mumbai and Delhi have hit the roof. Nair expects prices to start stabilising from this quarter. In centres where prices have not moved much, he expects that it may start rising by 10-15%. LIC Housing Finance is targeting a growth of 40% in loan disbursements in FY11, said Nair. The company's outstanding mortgage portfolio as on June 30, 2010 was Rs 40,030 crore as against Rs 29,254 crore as on June 30, 2009, showing a growth of 37%. Individual housing loans comprised 90% of the portfolio. Buoyed by this strong loan growth, the company posted a 71% growth in net profit for quarter ended June to Rs 212.02 crore as against Rs 123.84 crore in the quarter ended June 2009. Total income including other income for the quarter grew 30% to Rs 1,015 crore as against Rs 782 crore in the corresponding quarter last year.

LIC Housing Finance has already raised Rs 700 crore in July that takes the total amount raised so far this fiscal to Rs 4,000 crore. This fundraising is a part of the company's total borrowing programme worth Rs 20,000 crore for FY11. "We are planning to raise another Rs 1,000 crore this month by way of bonds," Nair said. Net interest margins of the company for the quarter ended June stood at 3.01% as against 2.45% in the corresponding quarter last year.

LIC Housing Finance's gross non-performing assets (NPAs) and net NPAs as on June-end stood at 0.92% and 0.35%, respectively, as against 1.51 % and 0.65 % in the same quarter in 2009. During April-June, the company opened 23 new marketing offices, which takes the total number to 205 offices. Meanwhile, LIC Housing Finance along with its parent Life Insurance Corporation (LIC) of India, will own a 20% stake in the Rs 500 crore real estate fund to be launched by October, Nair said. "The fund will be launched by September-end or October. LIC and LIC Housing Finance will invest Rs 100 crore in the fund," he said. A separate company has been floated for the fund. LIC Housing Finance is awaiting approvals from market regulator Securities and Exchange Board of India to launch the fund, he said. The fund has been designed to operate like a private equity fund that will invest in residential, commercial, and retail projects.

Source : www.insuremagic.com