Lic Housing Aims At Rs 132 Crore Net Profit This Fiscal

LIC Housing Finance Ltd (LICHFL), the housing finance arm of the Life Insurance Corporation of India, expects to register a Rs 882 crore income and Rs 170 crore gross profit followed by a Rs 132 crore net profit in 2001-02. The company is also scouting for a tie-up or a joint venture with organisations in related field of activities for developing assisted living community centre and development of housing complex.

Thrust for the company this fiscal is on default recovery, where the company along with other housing finance companies is lobbying with the government to set up a default recovery tribunal similar to that in the banking industry. The company is also planning to launch a number of new products to augment its income.

With falling interest rates, LICHFL has focused on providing competitive loans with thrust on quality. The company is also developing a non-resident Indian portfolio. On the client servicing front, the stress is on customer satisfaction with greater involvement from the LIC agents in selling housing-loan products.

On the operational front, the company aims at providing more autonomy at the shop floor level with upgradation of its information technology backup.

Meanwhile, the company took a major hit in the form of decreased margins with interest on lending falling seven times over the last few years, while interest on borrowing only being reduced a couple of times. This has led to a declining rate of growth over the last number of years, said chief executive officer and director, Kranti Sinha, at a press briefing in Kolkata today.

In the short run the company is looking for means of borrowing funds at reduced rates of interest and is also aiming at securitisation of its existing portfolio. The company has in fact managed to have Rs 1039 crore of loans from LIC rewritten at 11 per cent.

"We are also trying to have our loans from national housing board rewritten," said Sinha. LICHFL along with housing finance is also floating specialised products against houses mortgaged on higher rate of interest.

Meanwhile, the company is also lobbying with other companies in the sector to accord housing finance infrastructure status, since housing development has already been granted infrastructure status.

Sinha along with other company executives is also looking for concessions from the government in terms of easy flow of funds into housing finance sector through tax-free bonds, access to provident funds, pension funds and securitisation. The company is talking with the National Housing Board for a mortgage insurance fund.