LIC Housing Finance plunges 13% on disappointing September quarter results

Shares of LIC Housing Finance plunged 13 per cent to Rs 349.10 on the BSE in Wednesday’s intra-day trade on the back of heavy volumes after the company reported a disappointing set of numbers for September quarter (Q2FY23).

At 09:32 AM, the stock traded 11 per cent lower at Rs 356.20, as compared to 0.19 per cent decline in the S&P BSE Sensex. The average trading volumes at the counter jumped over five-fold today. A combined 10.2 million shares changed hands on the NSE and BSE.

LIC Housing Finance’s net interest income (NII) declined by 0.8 per cent to Rs 1,163 crore in the reporting quarter from Rs 1,173 crore a year ago. Its net interest margin also moderated to 1.8 per cent in Q2FY23 from 2.0 per cent a year ago. There seems to be a one-off in the interest income and total expenses which has led to a decline in NII.

However, the company reported 23 per cent year-on-year (YoY) jump in the net profit at Rs 304.97 crore in Q2FY23, predominantly due to a decline in provisions. It had posted a net profit of Rs 247.86 crore in Q2FY22.

The firm's gross non-performing assets declined to 4.91 per cent as of September 2022 from 5.14 per cent a year ago. The net NPAs were also down to 2.83 per cent from 2.98 per cent at end of September 2021. The provision coverage ratio was almost flat at 43.65 per cent as against 43.86 per cent.

The total loan portfolio was up 10 per cent YoY at Rs 2.62 trillion. Out of this, individual home loans grew at 15 per cent. Stage 3 exposure on default was at 4.90 per cent vs. 5.14 per cent and 4.96 per cent as on June 30, 2022.

Meanwhile, on October 31, LIC Housing Finance informed that the Reserve Bank of India has imposed a penalty of Rs 5 lakh on the company on October 21 for non-compliance with certain provisions of ‘The Housing Finance Companies (NHB) Directions, 2010’.

NHB had inspected LIC Housing Finance’s financial position as on March 2020 and found that the company had failed to create floating charge in favour of its depositors on a portion of the assets invested by it “in terms of Section 29B of the NHB Act, and non-registration of such charge with the Registrar of Companies”.