LIC Housing Fin PAT up 9.41%

LIC Housing Finance Ltd (LICHFL) has posted a higher net profit of Rs 45.23 crore in the third quarter of fiscal 2004, up by 9.41 per cent over the corresponding quarter last year.

Total income dropped in the third quarter by 9.33 per cent to Rs 251.92 crore, as against Rs 277.84 crore last year. Fall in total income in the third quarter followed the drop in other income.

In the nine months period ended December 2003, LICHFL reported a total income of Rs 731.94 crore, marginally higher than Rs 730.9 crore recorded in the corresponding period last year.

Net profit was higher at Rs 115.16 crore in the nine-months of fiscal 2004 against Rs 104.16 crore recorded in the same period last fiscal.

LICHFL director and chief executive S C Jain said the housing finance entity is negotiating with its lenders to reduce the cost of funds on about 40 per cent of its borrowings by over 200 basis points. "This reduction in the cost of funds will help us improve our net interest margins not only in the fourth quarter, but as the impact will be retrospective, it will have a positive effect over a seven month period of this fiscal," said Jain.

LICHFL has been actively in talks with its promoter the Life Insurance Corporation of India (LIC) to bring down the rate of interest on existing loans from the current 8.75 per cent. Loans from LIC account for 40 per cent of the housing finance arm's total borrowings.

It had borrowed Rs 3,400 crore from LIC for a tenure of 8 to 10 years. In the nine month period, LICHFL sanctioned 70,095 loans for a total amount of Rs 3,388.86 crore and disbursed 69,062 loans amounting to Rs 2,876.04 crore. "Business has been very encouraging and we have been able to maintain a good rate of growth in the third quarter as well," said Jain.