LIC HF plans to disburse 10% of total loan to developers
LIC Housing Finance, a subsidiary of Life Insurance Corporation of India (LIC) plans to disburse around 8-10 percent of its total loan portfolio to developers by the end of this fiscal, a top company official said.
Mumbai: LIC Housing Finance, a subsidiary of Life Insurance Corporation of India (LIC) plans to disburse around 8-10 percent of its total loan portfolio to developers by the end of this fiscal, a top company official said.
"Presently, around 6 percent of our total loan portfolio constitutes of developer loan. We plan to increase it to 8-10 percent in the current financial year," Director and Chief Executive Officer of LIC HF, V K Sharma said.
He, however, said the housing finance firm would not aggressively push this portfolio in this fiscal though there is an uptick in the loan disbursements to developers.
By the end of June quarter, LIC HF's outstanding loan portfolio was at around Rs 65,650 crore, which was a 24 percent growth over the same period last year.
While individual loans constituted 94-95 percent of the portfolio, developer loans comprised 5-6 percent of the total amount.
Earlier, the housing finance company had said that low developer loan portfolio had put margins under pressure and higher disbursals would increase the margin level.
Sharma also said respite in interest rate is necessary to boost the overall housing finance industry and to reduce the cost of borrowing for the housing finance companies.
Talking about the overall growth projection, he said," Overall growth in loan portfolio is likely to be around 20 percent in the current financial year," he said.
He also said there is no concern on the asset quality of the NBFC.
"There is no concern on the asset quality front. We have a total NPA of only around Rs 400 crore," he said.
Sharma, however, said that the real estate sector was not growing in the country with subdued activity in metro centres like Mumbai, Hyderabad and Bangalore.
"Growth is pretty subdued in the metro centres like Mumbai, Bangalore and Hyderabad. However, there is a demand in tier-II and tier-III cities," he said.
LIC HF posted a 11 percent drop in its net profit to Rs 228 crore in the first quarter of current financial year on the back of higher interest cost.
During Q1, it sanctioned Rs 4,900 crore loans to individuals, a growth of 33 percent over the same period last year.
It also sanctioned around Rs 410 crore loans to builders during this period, as against Rs 5 crore in the corresponding quarter of the previous fiscal.