Strong Disbursements in Q2 helps LIC Hsg Fin to post a decent set of numbers.
3 min readBusiness Highlights:
Total outstanding Loan Book is 2,37,660 crores as on 30 September 2021. A growth of 11% Y-o-Y.
Individual Home Loans portfolio grew by 15% Y-o-Y. It is showing healthy signs of growth and the same growth can be expected in the upcoming quarter as well.
79% of the total portfolio was towards housing loans as against 76% Y-o-Y. Growth was seen in all the segments and across all the geographies, especially in Tier 2 and Tier 3 cities.
Achieved a level of 132% of pre covid levels in terms of Q2 disbursements when compared with Q2 of Last year.
Asset quality would continuously improve over the coming quarters.
Disbursements in project loans were 353 crores.
Reduction in cost of borrowings of 12 basis points in Q2 FY22.
The incremental cost of borrowings is at 4.95%.
Preferential issue of equity allotment of 2,335 crores to the parental and promoter company completed in the Q2 FY22.
Reversal of Interest amounting to Rs. 250 crores were seen in Q2 FY22 due to One Time Restructuring ( OTR ) impact.
This reversal of interest in the upcoming 2-3 quarters but the quantum impact will be lower.
For every 100 crores of reversal of interest, there is an impact of 16-17 basis points on NIMs.
One-time impact of 45-46 crores towards retirement benefits in Q2 FY22.
OTR’s are almost 3.25% of the total loan book. Because of OTR’s there can be an increase in provisions in the coming quarters.
NPA’s are comfortable now when compared to previous quarters and in terms of Asset quality as well.
Collection efficiency to be maintained at 97-99% in the upcoming quarters.
Stage 3 NPA are 3.25 for individual housing, the non-housing commercial is 14.83%, 9.83 nonhousing individual, Project developer 23.94%.
Out of the total 7,300 crores restructured, most of them are in Stage 1 and Stage 2.
Home Loans rates are 6.90% and very good volumes are seen in home loans and almost back to pre -covid levels in this segment.
Volume of NPA came down in the tune 1,500 crores in this quarter which is a very good sign.
Out of the total portfolio, 50% is from tier 2 and tier 3 cities.
Top 7 cities constitute approx. 43% of the total business.
OTR stage 2 loan book is split between Individual builder loans in the tune of 62 crores and retail category in the range of 2,078 crores in Q2 FY22.
Targeting NIM in the range of 2.5% from the next financial year.
More focus in the upcoming quarters is on the stability of spreads. Upcoming H2 will be better than H1. And Q3 and Q4 will be more better than Q2
Collaborations and Tie-ups:
Company had a tie up Indiapost payment bank for its loan disbursements in affordable housing segment.
This tie up will help the company to increase its reach in Tier 2 and Tier 3 cities.
Continuously monitoring tie-ups and collaborations. Few are currently in the pipeline and company are open if there are any such new opportunities to increase its reach and presence.
Governmental Support:
Better support from the government is received till now and the same is expected to be received in the affordable housing segment in the upcoming years.
Better prospects are expected in the affordable housing segment owing to better budgetary allocations from the government in the future.
No challenges are been seen for this segment in the future 3-5 years.