LIC Housing Finance Q4 net slides 19%

LIC Housing Finance Ltd (LICHFL) on Wednesday said it had posted a 19 per cent dip in net profit for the fourth quarter ended March 31, at Rs 253 crore, on higher borrowing costs and provisioning.

The city-headquartered life insurance giant LIC’s housing finance subsidiary’s net profit for the corresponding quarter in the last financial year was Rs 314 crore. “Our net profit went down due to higher cost of borrowing with interest rates being elevated, and a Rs 150-crore jump in provisioning due to revised norms announced by National Housing Bank,” LICHFL Chief Executive V K Sharma told reporters here.

Additionally, last year the company had a one-time income of Rs 169 crore from stake sale in a mutual fund business, he said. The company’s scrip closed down 0.04 per cent at Rs 258 on the BSE, whose 30-share index ended 0.3 per cent down at 17,151 points. Sharma said the net interest margin (NIM) registered an improvement sequentially — from 2.3 per cent in Q3 to 2.4 per cent in Q4 — but was down year-on-year when it stood at 3.08 per cent. He sounded confident of regaining lost ground and touch three per cent as the quantum of loans given under floating rate increases and rates soften.

The company’s cost of funds moved to 9.2 per cent in the March quarter from eight per cent of the last financial year and 9.4 per cent in the December quarter. For the entire financial year as well, LICHFL’s net profit was down six per cent to Rs 914 crore.

The company was able to squeeze its net non-performing assets ratio to 0.4 per cent of the total assets compared with 0.5 per cent in the year-ago period.

Its core Tier-I capital stood at 10 per cent as on March 31, while the Tier-II capital was at six per cent, Sharma said, adding the company would be augmenting the core Tier-I through an institutional placement. LICHFL plans to sell up to 4.6 crore shares through a QIP issue, he said, refusing to divulge the exact amount which the company was planning to raise through the issue. Post-issue, the Tier-I capital will go up to 12 per cent, Sharma said.

During the quarter under review, the company witnessed a 22 per cent jump in individual loan disbursements and growth came from the South, East and Central regions, Sharma said. For the next financial year, the company is targeting a 20 per cent jump in individual disbursals, he said.