Mortgage lender LIC Housing Finance (LICHF) posted a slower-than-expected 21% year-on-year growth in its net profit for the April-June quarter. It's PAT came in at Rs 256.50 crore on the back of a sluggish real estate market. Net interest margin (NIM) declined by 67 points to 2.78% (sequentially), suggesting the underlying margin pressure due to rising cost of funds.
The results were majorly below market expectations. A CNBC-TV18 poll saw net profit of Rs 287 crore and a margin contraction to the tune of 10-15 bps.
Net interest income (the difference between interest earned and expended) rose 23% to Rs 361 crore while income from operations jumped 40% to Rs 1,358 crore from Rs 971crore YoY.
"There has been some sluggishness in real estate transactions in certain parts of the country on account of customers going into wait-and-watch mode. However, off-take in our business in June was quite healthy," VK Sharma, director and chief executive, LIC Housing Finance said in a release.
During the quarter, the company expanded its individual loan disbursements by 15% YoY to Rs 3,468 crore. However, the company's project loan disbursements plunged 79% to Rs 77 crore. Its outstanding loan book grew at 32% to Rs 52,876.
The housing finance company had stopped giving corporate loans after one of its top executives was allegedly involved in a housing loan scam in 2010, which was resumed in March.
The stress in housing finance market was also reflective on the company's asset quality in the first quarter of 2011-12. The gross non-performing assets (NPAs) increased sequentially from 0.47% to 0.84% while the net NPAs rose from 0.03% to 0.35%.
LICHF shares slipped 4% to Rs 215.15 at the close of Wednesday's trading.
Source: www.moneycontrol.com
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