LIC Housing Q3 Net up 38% on loan growth, dip in provisions

MUMBAI: LIC Housing Finance, the mortgage subsidiary of Life Insurance Corporation, on Thursday reported a 38% jump in net profit for the quarter to December on lower provisioning, improved margins and steady growth of portfolio.

The company said profit rose to Rs 327 crore from Rs 236 crore in the year-ago quarter.

"The profit has come from lower net provision and steady portfolio growth," said Sunita Sharma, MD and CEO at LIC Housing Finance. "We are focused on asset quality and very particular about lending to developers."

The company said net interest margin rose 2.16% from 2.09%. The company saw reversal of provisioning of Rs 30 crore, as some of the non-performing loans turned standard. Provisioning for the quarter was down Rs 7.46 crore. Net non-performing assets were down at 0.40% from 0.46%.

LIC Housing Finance, the country's second largest mortgage lender, saw 10% increase in sanctions to Rs 6,700 crore, while disbursements in the segment grew 6% to 6,000 crore.

The company is choosy in lending to developers, which comprise only 3% of its total book. During the quarter, the company saw demand coming from cities like Bangalore, Pune and Mumbai. Average loan ticket size remained steady at Rs 19 lakh.

The mortgage lender plans to borrow Rs 8,000-Rs 9,000 crore during the quarter to March from banks, public deposits and non-convertible debentures.

"Interest rate volatility is a challenge, so we have to be agile and look for other avenues," Sharma said. "We are looking at a number of avenues such as public deposits, NCDs and banks to borrow Rs 8,000 crore."