You are here: Home » Companies » News
Business Standard

LIC Housing Finance expects Q3 loan growth to be in double-digits

India's second-largest pureplay mortgage lender LIC Housing Finance expects a bumper festival season as it eyes loan growth to be in double-digits

Topics
LIC Housing Finance | housing loans

Press Trust of India  |  Mumbai 

loans, aum, assets, banks, investment, shares, stocks, funds

On the back of "a much-more-than-expected recovery in demand since the past two months", India's second-largest pureplay mortgage lender expects a bumper festival season as it eyes loan growth to be in double-digits, a top company official has said.

The LIC arm reported positive numbers even in the June 2020 quarter which was a washout for the entire economy, with a net income of Rs 817.48 crore, up 34 per cent y-o-y, even though its net interest income rose only 3 per cent to Rs 1,220.61 crore and the loan sales grew 6 per cent.

To drive demand, the company has waived off processing fee for two months ending November as part of its festive offer. And, Siddhartha Mohanty, managing director and chief executive of LIC Housing Finance, feels the results are already visible.

Another enabling factor is the stamp duty cut by many states and the marginal fall in home prices across the major markets, Mohanty said. All these factors coupled with the firm's festive offer should help us grow in high double digits in the third quarter, he added.

"The last three months have been positive. The third quarter should be much better, and we expect to grow in high double-digits and also a massive jump in disbursals," Mohanty told PTI in a recent interaction, refusing to put a number to the optimism.

He added that the recovery has been much above his expectations so far, and the company expects the second half to make up for the first half by a wide margin.

"On a month-on-month basis, our demand is well past the pre-lockdown months," he added.

He said demand is visible across the country and across the loan segments, though the small towns and affordable loans take the lead. "Even the seven largest metros are back to pre-pandemic levels. In short, we see higher demand from regions are positive."

Describing the stamp duty cut to a flat 2 per cent as a big boost to demand, he said the move has made buying house in city like Mumbai cheap. Aiding this is the price stability across the markets and segments since the pandemic.

Expecting the December quarter to be a bumper month in terms of disbursals on the back of the processing fee waiver, he said the ongoing quarter should be much better than last year. He expects manifold jump in sales in the March 2021 quarter as in the March 2020 quarter they had lost a whopping Rs 15,000 crore loan sales due to the pandemic.

He also said the company has disbursed Rs 2,115 crore in home loan subsidies to its customers who are eligible for the credit-linked subsidy scheme under the PM Awas Yojana since its inception in 2017 and end-September. The amount has been disbursed to 1,01,521 borrowers.

Total loan disbursed under this scheme is over Rs 12,000 crore, making us the second-largest lender under this scheme, Mohanty said.

On the moratorium accounts, Mohanty said it is 25 per cent of the book, of which individual loans accounted for 16 per cent, and it has made a provision of Rs 2,669 crore in the June 2020 quarter.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Thu, October 15 2020. 21:06 IST
RECOMMENDED FOR YOU
.