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LIC Housing Finance conducted a conference call on 30 Oct 18 and was addressed by Mr. Vinay Sah, MD & CEO
Highlights:
Loan disbursement in Sep 18 quarter was up by 30% to Rs 14272 crore YoY. Individual loan book disbursement was up by 9% YoY and stood at Rs 11324 crore. LAP is growing at around 15% YoY.
Strong pipeline of sanctions on project loan translated into disbursements. Total disbursement towards project loan stood at Rs 2948 crore as compared to Rs 608 crore in Sep 17 quarter. Rs 3000 crore of builder loan proposals rejected due to quality issues. 40% of builder loan is western India. No buyouts of builder loans so far
No exposure to IL&FS
Don't see much of transaction of transfers and selling of book happening. Whatever is there is only news.
Weighted avg cost of funds remained stable at 8.30% vis a vis 8.29% in Sep 17 quarter despite overall interest rates being revised upwards.
Overall spreads sequential improved by 4 bps
In line with the rate hike cycle, the company also hiked PLR by 30 bps in Sep 18 quarter. So far 60 bps hike in FY 19
Full impact of rake hike in Dec 18 quarter, so NIM should improve
Demand side will remain strong on housing in coming times
Reprising is over and margin improvement
Lower Tax rate is due to deferred tax under Ind AS. Overall tax rate will move towards max marginal rate ie 30%.
The company had earlier created provisions according to Expected credit losses (ECL) mechanisum in June 18 but the effect was given from Sep 18 quarter onwards in the balance sheet and P&L. Whatever provisions is required as per ECL has been done. Coverage ratio has increased significantly due to that.
The company has added incremental Rs 200 crore towards provision over and above normal provisioning as per NHB act. ECL model loss provision is in line with the industry
PLR hike is on all the loans so real impact of improvement in NIM will be visible on all the loans.
Added around 7600 accounts under Affordable housing scheme vis a vis 3400 accounts YoY. Value terms Rs 1518 crore disbursement in Sep 18 quarter vis a vis Rs 249 crore YoY
Asset quality is stable.
Despite tough market conditions have raised funds and overall cost of funds has come down.
Overall demand is strong and margins will improve despite challenges.
Confident of bringing Gross NPA below 1 and further recovery of loans. There are still 4-5 developer loan accounts which is in NPA and some more recovery expected going forward.
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