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Wednesday, April 25, 2012

LIC Housing Fin net drops 19% as interest cost soars

LIC Housing Finance has reported a 19 per cent drop in net profit to Rs 254 crore in the January-March 2012 period against Rs 315 crore in the corresponding year-ago period.

In the full year ending March 31, 2012, the housing finance company reported a 6 per cent fall in net profit to Rs 914 crore (Rs 974 crore in FY11).

The board has recommended a dividend of Rs 3.60 per equity share of Rs 2 each subject to approval at the forthcoming annual general meeting.

In the reporting quarter, the profit was impacted mainly due to a 44 per cent jump in interest costs at Rs 1,257 crore (Rs 873 crore), and a 55 per cent decline in ‘other income' at Rs 27 crore (Rs 60 crore). Higher provisioning prescribed by the housing finance regulator on standard assets also pulled down the profit. LICHF made a provisioning of Rs 150 crore towards standard assets.

LICHF Director and Chief Executive, Mr V. K. Sharma, said,“The year was extremely challenging and the business environment was unrelenting…NIMs have started showing some signs of improvement in Q4.”

Net Interest Margins (NIM) for Q4 FY12 stood at 2.44 per cent as against 2.27 per cent for Q3FY12.

The housing finance company has put in place systems and procedures so that project financing proposals could be fast-tracked, said Mr Sharma. The plan is to modify the loan book mix to 92 per cent retail (95 per cent currently) and 8 per cent project finance (5 per cent) in FY13.
Fund raising

LICHF will raise Rs 25,000 crore to support a loan book growth of 25 per cent in FY13. Of this amount, 70 per cent will be mopped up by issuing non-convertible debentures and the balance through bank loans, refinance from the National Housing Bank and retail deposits.

“We plan to raise Rs 1,000 crore from retail depositors. Currently, our retail deposit portfolio stands at Rs 300 crore,” said Mr Sharma.

Shares of LICHF closed 0.04 per cent down at Rs 258.20 per share on the BSE as against the previous close of Rs 258.30.


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