Our Company was incorporated in the year 1987 which was declared by the United Nationsas The International Year of Shelter for the Homeless. The main objective ofsetting up the company was promoting home ownership and increasing the housing stock inthe country a noble objective indeed. Over the past three decades CFHL has constantlyendeavoured to provide homes to families for whom owning a home has always remained adream. In these three decades Indias population has expanded skylines of urbanIndia have transformed to touch the skies and our country has emerged as the fastestgrowing economy in the world. With each decade housing finance landscape changedchallenges and opportunities evolved and so did we.
We now stand at the threshold of our fourth decade with the same excitement as ourfounders drawing inspiration passion and excellence to take our company to newfrontiers. As we recall our past laurels and review our accomplishments for the year FY16-17we have our focus clearly on the opportunities ahead of us with our most precious assetsi.e. our team members to build a bigger and stronger Can Fin Homes in the decades tocome.
REVIEW OF 2016 17
The Countrys economy is expected to register a GDP growth of 7.1% in the currentfiscal. The year 2016-17 remained significant for the Housing Finance sector as well asthe Real Estate sector. The Governments initiative for Housing For All by2022 and Pradhan Mantri Awas Yojana (PMAY) are the much awaited triggersto boost the housing sector in the country. Interest subvention of upto a maximum of H2.67 Lakh under Credit Linked Subsidy Scheme (CLSS) is available to the first time homebuyers from the Economically Weaker Sections and Low Income Groups seeking housing loans.The subsidy scheme has now been extended to MIG category of borrowers as well withincomes of upto H 1.50 Lakh per month; the initiative augurs well for real estate andhousing finance sector.
Being at the helm of affairs of this organisation during such exciting times is indeedan opportunity to cherish. Im pleased to report that we continued to upholdcommitment levels register record profitability drive operational efficiency invest inpeople products infrastructure and increase our business with focus on growth withquality.
Our loan approvals grew at 23% disbursements at 22% and loan outstanding at 25% on aYOY basis even as demonetisation slowed down real estate offtake in the second half ofthe year. We have been able to show a steady growth of loan book and reach a size of H13313 Crore. Our CAGR of 38% over FY12-17 compares favourably with the industryaverage of 18%.
While our Assets under Management (AUM) has shown an impressive growth Year-on-Yearour profitability was not left behind. Our operating profit grew by 42% net profit showedan increase of 50% and NII grew by 40% YOY. The easing liquidity position helped us rejigour borrowing basket resulting in reduction of borrowing cost from 8.75% to 8.35%. NIMgrew from 3.24% to 3.54%. The cost to income ratio was contained at 17.02% as compared to18.67% for the previous year. Our gross NPA at 0.21% is one of the lowest in theindustry and the Net NPA remained Nil for the 8th consecutive year. The Company is wellcapitalised with a CRAR of 18% and Tier I ratio of 16.01% as against regulatoryrequirement of 12%. The ROE of 21.86% and ROA of 1.97% are aligned with our overallperformance and recognising this the market capitalisation crossed the mark of H 7000Crore.
Our strong financials are a result of our resilient operating performance. We continuedto expand our branch network delving deeper into our stronghold of southern states whilewe have made significant inroads in to newer geographies with potential. As on March 312017 we had a branch network of 170 offices spread across 19 States & UnionTerritories including 10 Affordable Housing Loan Centres (AHLCs) opened during the lastquarter of the year FY16-17. The AHLCs were opened in upcountry locations to caterespecially to the affordable housing segment in line with the Governments thrust tothe sector. CFHL has been the first HFI to open such exclusive centres for granting loansunder the affordable housing loan category. During the FY17-18 CFHL has plans to open 22offices (12 branches and 10 Satellite Offices). The Company will also open 20 more AHLCstaking the number of such exclusive outlets for affordable housing loans to 30 tocommemorate its 30th year of operations.
The Company was operating in a 2 tier system since inception which has now beenchanged to a 3 tier system for better growth control and oversight. Five clusters havebeen formed one each at Bangalore Hyderabad Chennai New Delhi and Mumbai with SeniorExecutives heading the clusters and overseeing 30-35 branches each. This has helpedachieve operational efficiency in the Company.
Increasing urbanisation rise in employment higher disposable incomes and benefitsoffered to the sector in the Union Budget 2017 is expected to result in higher real estateofftake. Of the total loan approvals for the year 88% were for housing loans and 12 %were for non-housing loans with an average ticket size of H 18 Lakh for housing and H 10Lakh for non-housing segments respectively.
Of the total loan book of CFHL 75.5% comprise salaried and professional category ofborrowers. 96% of the total approvals were for borrowers in the income bracket of upto H18 Lakh per annum the re-defined limit eligible for affordable housing loan subsidy. Theniche borrower segment the strong clientele base of over a Lakh retail customers thefast track approval systems and the efficient underwriting skills of our officers hasinstilled confidence in us to target a larger and wider clientele when the Nation isadvancing towards Housing For All by 2022.
Our stock has marked its presence in the NIFTY 500 index as well as entered into theFutures and Options category. The year also witnessed the entry of M/s CaladiumInvestments Pte Ltd (an affiliate of GIC Singapore) as one of our stakeholders. They haveacquired 13.45% stake from Canara Bank through a bidding process conducted by the Bank.The entry of such marque investor is a significant value addition in terms of confidencethat the investors put on us.
While business was our main focus as a responsible corporate citizen we havefulfilled our Corporate Social obligations by disbursing H 3.36 Crore towardsinfrastructure improvement in 123 schools across the country and H 1 Crore towards thePrime Ministers National Relief Fund.
After three decades we now stand at a pivotal moment in the history of our Company.With our glorified past and the achievements today as major sources of inspiration andwith our enthusiastic passionate and dedicated team members we are committed to continuethe growth story of Can Fin Homes. Your company had drawn up a vision document thatenvisages a loan book size of H 35000 Crore by 2020 which keeps motivating us.
Our journey this far would not have been possible without the unstinting support andguidance of National Housing Bank our regulator; Canara Bank our parent institution; theBoard of Directors customers stakeholders Lenders Lawyers Valuers Direct SellingAgents Auditors and the Rating Agencies.
S K HOTA