As we enter the 4th decade of our remarkable journey we continue with ourpassion to help millions of people on their path to owning their own homes. with ourresponsiveness resourcefulness and responsibility we remain committed to exceed customerexpectations
Greetings and best wishes to all of you as we step into a glorious 4thdecade of operations in FY2020 with determination and focus. We have defined our goalswith the strong pace of our strategic delivery and improved performance.
Our progress in the past three decades has been indeed phenomenal. We have grown biggerand better every single year - from 8 offices in 1989 to 282 offices now; from 8 employeesto 2392 employees; from a portfolio of ' 25 crore to ' 2.10 lakh crore;from a disbursement of ' 11 crore to ' 55000 crore; from an interest incomeof ' 47 lakhs to ' 17362 crore; from a net profit of ' 57000 to '2431 crore. Today we can proudly say that we have touched the lives of over 27.7 lakhpeople are currently servicing about 12 lakh individuals and have always been thefront-runner in ensuring affordable access to housing finance and help realise people'sdream of owning a house.
Even after 30 years we are as passionate as ever in our mission to help millions ofindividuals on their path to owning a home. We continue to be one of the largest playersgrowing in size stature and profitability in the housing finance industry. With a strongbusiness foundation an extensive distribution network and with proven industry expertisewe are enormously trusted as a respected financial services company. Our law-complianttransparent and professional board of eminent personalities of experience and excellencein different fields provides us with the right guidance.
impact of COvID-19
India's real estate sector which was just emerging out of the past market turbulencepolicy reforms and liquidity crisis suffered a setback with the COvID-19 pandemic whichcaused income uncertainty and poor consumer sentiments. The outbreak of the pandemic andlabour unavailability dampened real estate activity caused construction delays andreduced demand affected liquidity increased stress in the housing finance sector anddented consumer sentiments even further. Income disruption caused by the economic slowdownand the pandemic-imposed lockdown had an unfavourable impact on the industry.
However things are not all bleak - the government's fiscal stimulus measures tomaintain liquidity and economic continuity helped. As part of the relief package theReserve Bank of India announced a ' 10000 crore funding to NHB to providerefinance to housing finance companies. The Ministry of Housing also extendedcredit-linked subsidy scheme for the middle-income group by one year - from April 2020 toMarch 2021. RBI allowed a moratorium of 3 months to all term loans reduced the cashreserve ratio and cut down repo and reverse repo rates.
At LIC Housing Finance we not only extended the moratorium facility but also passedon the benefits of reduced interest rates to all the eligible borrowers. The silver liningin the cloud is that the lockdown also provided some disguised opportunities such asinclination of first-time buyers to go for own home and demand for bigger fiats in view ofsocial distancing norms.
our 4-R strategy
The pandemic has a major impact on the way we live and work. In the current turbulentand unprecedented times businesses of all sizes and industries need to get adjusted todisruption and change. What stood us in good stead was our resilience and zeal to meet achallenge head-on and ride it out with strength and stability. We understand that manythings will never be the same again. To pave our way for a better and sustainable future
we devised a 4-R strategy - Retail Recovery Retention and Re-engineering as ourguiding force for the year as we reimagined our tomorrow.
The strategy aims at focus on getting more retail-based loans; recovering the pendingdues; retaining the existing borrowers; and re-engineering the work environment so thatany kind of disruption will have no adverse impact on business continuity. We are workingtowards redefining the concept of tomorrow's office - one with a purpose-driven workenvironment that fosters communication and ideation supports business processes andfunctions increases collaboration and engagement enriches customer experience andlastly maximises engagement and minimises disruption.
MAKING THE RIGHT INVESTMENTS
Amidst the challenging times one thing constant has been the power of technology tohelp organisations to adapt reinvent and transform. Going ahead business processre-engineering will hold the key to the future. A revamped IT platform is required to takecare of the present requirements and the challenging future needs.
We have resolved to keep making investments in the right technology to stay prepared toface a crisis and challenge of this magnitude. Our aim is to gain capabilities in offeringe-solutions to reduce future disruptions which was indeed challenging considering our30-year legacy and an outstanding portfolio of ' 2 lakh crore. We are also workingon our risk management practices to enable us to assess situations that potentiallythreaten productivity and jeopardise our services. With all this our aim is to becomefuture-ready to be able to face the future better with tech-led processes and seamlessintegration of systems.
As we adapt to a new normal of living and working conditions home ownership will beconsidered as an important yardstick to impart a sense of security. The intrinsic demandfor housing will remain strong in the long run. The realty sector in India is expected toride out the situation through innovation and improved productivity. There will besustained demand for affordable and mid-market segment on the retail side in Tier 2&3cities. We will keep funding such projects considering their viability and salesvelocity. Our key purpose is that by FY2022 we should be able to align ourselves with thegovernment's vision of "Housing for All by 2022 and contribute to nationbuilding in our humble way.
Although it is not easy to accurately assess the magnitude of impact of the pandemic inthe long term it will mostly depend on coordinated steps by the government and RBI.However it is likely to impact performance of HFCs as credit growth will be affected.The realty sector has been affected on three fronts - availability of labour dearth offunding and lack of demand for housing stock. For housing finance companies recovery ofloans will continue to be a challenge as livelihoods of customers has been affected. Lossof livelihoods and reduction in income especially for selfemployed borrowers may have animpact on our income and asset quality and we may have to brace ourselves for a moderationin profitability indicators.
However the long-term prospects of the segment will remain good. Policy rate cuts byRBI along with liquidity and credit measures and likely fall in property rates bydevelopers will boost demand for home loans. The demand for housing by the employees inthe organised sector is expected to revive after the lockdown further supported by theformalisation of the realty marketplace through RERA and stabilisation of GST. As one ofIndia's largest housing finance players we are well-positioned to capitalise on theseconditions reinforced by our proactive investments in technology wide product portfolioexpanding distribution network and superior fundamentals.
At LIC Housing Finance we remain steadfast in fulfilling the unmet housing needs ofmillions of Indians and are positive about the intrinsic demand for housing in the longrun. We are working collectively towards bringing confidence back into the real estatesector and have also been sincerely playing a role in supporting the housing financeindustry. We are totally supportive of the government's policy that develops theaffordable housing finance sector in India.
We are long-term players in this business. With deep knowledge and a service mindsetwe continue to live our dream of building a roof for every Indian by supporting affordablehousing serving new home buyers and making their dreams come true. We plan to leverageour extensive reach to connect with the customer and have been using digitisation to plugthe gaps in enhancing customer experience and increasing operational efficiency.
Our long-term vision is to certainly be the lender of choice for all customers. Weaspire to be the most preferred housing finance company providing value for all ourstakeholders and delivering consistent growth. With our 31-year legacy we aim to continuescaling new heights and maintaining our position as one of India's leading housing financecompanies.
I wish you all the best for the journey of excellence. We will remain true to ourmission of enabling growth and progress and will continue to be true to our values as weserve our clients. As we have shown in FY2020 our targets are achievable and we arecommitted to continue making steady progress towards them every day throughout FY2021.
With best wishes
M. R. Kumar