LIC Housing Finance conducted conference call on 17 May 2023 to discuss its financial results for the quarter ended March 2023. Y. Viswanatha Gowd, MD&CEO of the company addressed the call:

Highlights:

The loan book of the company has increased by 10% to Rs 2.75 lakh crore and individual loan Book has increased by 12% to Rs 2.29 lakh crore end March 2023. The individual loan book accounts for 83% of the overall on book.

The disbursements of the company have declined to Rs 16027 crore in Q4FY2023 from Rs 19315 crore in Q4FY2022. Individual loan disbursements have declined to Rs 12406 crore from Rs 16341 crore. The project loan disbursements have increased to Rs 1554 crore up from Rs 428 crore.

The net interest margin has jumped to 2.93% in Q4 from 2.64% in Q4 last year. There is no one-off in margins for Q4FY2023.

The gross stage 3 advances have declined to 4.37% end March 2023 from 4.75% end December 2022 and 4.64% end March 2023.

The overall provisions stands at Rs 7230.26 crore end March 2023 with stage 3 provision coverage of 44%.

The company has conducted write- off of loans amounting to Rs 350 crore in Q4 and Rs 540 crore in FY2023 of which Rs 200 crore related to individual loans and Rs 300 crore to corporate loans.

The company expects credit cost to moderate ahead. The strong recoveries have helped to stabilize the loan portfolio asset quality.

The cost of funds for the company has increased by 111 bps in FY2023 against 250 bps hike in RBI policy rates. The company has raised lending rates by 210 bps in FY2023 and further 25 bps is hike effective from 1 April 2023.

The disbursements have been impacted due to interest rate hikes and customer on wait and watch approach. With rates stabilizing, the company expects some fraction ahead.

The company expects to improve net interest margin above 2.5% in FY2024.

The company is expecting some resolutions helping to improve asset quality. The credit cost is estimated at 405-50 bps for FY2024.

The company is targeting recoveries of Rs 400-500 crore in FY2024.

The company is targeting 12-15% growth in the individual loan disbursements and 10-12% growth in the overall disbursements.

The capital adequacy ratio is expected to be over 18% end March 2023.

The company has raised borrowings of Rs 5000 crore from NHB and expects further fund raising from NHB in FY2024.

The company is also expanding its distribution network to support loan growth.

Outstanding restructured loan book stands at Rs 748 crore. Out of the total restructuring of Rs 7000 crore, about Rs 1000 has been closed and fully repaid, Rs 1500 crore has slipped to NPA category and the balance amount is in stage 2 category.