PNB
Housing Finance conducted a conference call on 24 July 2023 to discuss its
financial results for the quarter ended June 2023. Girish Kousgi, MD&CEO of
the company addressed the call:
Highlights:
The company has completed
right issue of Rs 2494 crore in Q1FY2024, which was subscribed 1.21 times. All
the top 4 shareholders of the company participated in the right issue. The proceeds
of the right issue are utilized for disbursements.
The Q1FY2024 was eventful
for the company and the company has done well on most parameters.
The disbursements of the
company have increased by 8%. With the intention of derisking the future
balance sheet, the company focused on home loans, salaried segment and the low
ticket loans.
The retail on book of the
company has increased by 11%, while the overall loan growth was at 5% end June
2023.
The company is well on track
to achieve the retail loan growth of 17-18% and disbursements growth of over
20% in FY2024
The loan book of the company
has increased to seven quarter high of Rs 60395 crore end June 2023, amid continuous
defocus from the corporate loan book.
The company has
significantly reduced the book run off from 23% in Q1FY2023 to 16.58% in Q1FY2024.
There is a significant momentum
on the asset quality side and the bank is very aggressive on the legal action,
SARFAESI, collection and settlement.
The company has a good pool
of asset ready for auction. Thus, the company is expecting significant
reduction in NPAs in rest of the year.
The credit cost of the
company stood at 0.36% which mostly was an account of raising PCR and building
ECL provisions.
The share of below 1 crore
accounts in the loan book has increased to 85% from 81% last year, while the
share of the South region in the loan book is also improved.
The branch network of the
company has increased to 198 from 189 and March 2023. The affordable housing
Finance branches were at 88 end June 2023 and the company aims to raise this count
to 100 branches in couple of quarters.
The corporate loan book has
dipped 45% yoy and 10% on sequential basis end June 2023.
The yield has improved to
10.59% from 10.4%, while the cost of borrowing has increased to 7.97% from
7.76%. An incremental as well as book cost of borrowing stands at 8%.
The spread have eased marginally
to 2.61% from 2.65%, while the NIMs have improved to 3.86% from 3.74%.
The return on assets stood
at 2.07% and return on equity was at 11.18%. The capital adequacy ratio was 30%
and the leverage was 3.82 times.
The company expects to
maintain spreads at 2.5%, margins at 3.5% and credit cost at 0.6% for FY2024.
From next year onward, the
company expects credit cost at 0.4%.
The company aims to improve
the asset quality to the best in the industry in next 4 to 5 quarters.
The corporate loan book
stands at Rs 3400 crore of which the NPAs stands at Rs 850 crore relating to
two accounts with one account having 92% of the NPAs.
The company is aggressive on
the resolution of these accounts and expects the large account to achieve
resolution in next few quarters.
The company expects the gearing
would rise about five times and loan book to touch to Rs 1 lakh crore in next 3
to 4 years.
The company would be
comfortable with a gearing ratio of 6.0-6.5 times.
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