VK Sharma MD and CEO of the company addressed the call.
Highlights of the call by Capital Market:
For the quarter ended September 2013, LIC Housing Finance registered a 28% jump in Net Interest income (NII) to Rs 453.40 crore. The jump in NII was due to 23% rise in interest income to Rs 2223.71 crore and 22% rise in interest expenses to Rs 1770.31 crore.
PBT grew 27% to Rs 423.66 crore.
PAT grew 28% to Rs 310.07 crore.
For the six month ended September 2013, NII grew 29% to Rs 908.12 crore. The jump in NII was due to 23% rise in interest income to Rs 4353.97 crore and 22% rise in interest expenses to Rs 3445.85 crore.
PBT grew 33% to Rs 847.68 crore.
PAT grew 32% to Rs 620.58 crore.
Change in strategy
The company has changed its strategy from very aggressive growth to profitability growth to protect its profit margins.
The company strategically reduced landing in Q2 as it decided not to borrow at 11.5% and lend at around 10.5%. Now again borrowing cost has come down to 9.6% and so it is going in full throttle.
One time income and expenses
Other income has one time income of Rs 19 crore due to tax refund. Also there were higher income from mutual funds.
Provisioning has Rs 12 crore of one time provisioning for its investment in Kotak realty Fund. Also company has increased its provisioning considering higher developer bucket loan.
NII to rise going forward
Net Interest Margins for the Q2 stood at 2.22% against 2.10% for the quarter ended September 30, 2012.
During the quarter the company faced pressure on NIMs.
Net Interest Margins for the six months ended September 30, 2013 stood at 2.26% against 2.13% for the corresponding period ended September 30, 2012
The management is confident of ending the year with NIM of 2.4%.
During the quarter, the company disbursed a total of Rs.5947 crore as against Rs.5838 crore for the same period last year. Disbursements in the developer loan segment were Rs 265 crore as against Rs. 121 crore for the same period last year.
For the six months, the company disbursed a total of Rs 11073 crore as against Rs 10629 crore.
Disbursements in the developer loan segment were Rs 332 crore as against Rs. 443 crore for the same period last year.
The company is slowing entering to the developer funding business in a cautious manner to increase its share.
Outstanding Mortgage Portfolio
The Outstanding Mortgage Portfolio as on September 30, 2013 was Rs 83216 crore as against Rs 69119 crore on September 30, 2012, up 20%.
The Individual loan portfolio stood at Rs 80704 crore as against Rs 66458 crore, a growth of 21%.
The Developer loan portfolio stood at Rs 2512 crore as on September 30, 2013 as against Rs 2660 crore as on September 30, 2012.
Gross NPAs in individual segment was Rs 374 crore or 0.46% as on September 30, 2013 as against Rs 406 crore or 0.61% as on September 30, 2012.
Total Gross NPAs for the company including NPAs on Developer Loans stood at 0.73% as on September 30, 2013 as against 0.60% as on September 30, 2012.
NPAs on Developers Loans was Rs 236 cr as on September 30, 2013 as against Rs 246 cr as on June 30, 2013. There were no new issues and the company is managing to recover previous pending repayments o this front.
Good performance in challenging business environment
In a very challenging business environment, the company has been able to maintain good asset quality and improved profitability. For the full year, it expect loan book growth at around 20% with some improvement in margins
Fixed rate loan book stood at 50% with a yield of 10.3-10.4%
Over loan book yield is 10.93%.
Loan against property was 3.4%.
Cost of funds
Banks accounted for 28% of total liability and cost of funds was 10.7%, NHB accounted for 4.5% with cost of 9.18%. NCD accounted for 61.4% with a cost rate of 9.4%
Retail deposit is slightly more than 1% with rate of 9.6%.
Outstanding borrowings stood at Rs 75170 crore with incremental spread of 1.2%. This is lower than 1.8% in Q1. However as the bond markets have again become favourable the company expects this to rise back to 1.8% for the full year.
Sanctions were 6500 crore out of which retail sanction was 6150 crore and developer sanction was Rs 350 crore.