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Improvement in Asset Quality helps LIC Housing Finance to post 6%YOY rise in Net Profit in Q3 FY22 | LIC Housing Finance Q3FY22 Result & Conference Call

Improvement in Asset Quality helps LIC Housing Finance to post 6%YOY rise in Net Profit in Q3 FY22 | LIC Housing Finance Q3FY22 Result & Conference Call

Published on 31 January 2022 .Views 26 .Comments 0
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Business Highlights:

Company expects to resume all economic activities in Q4. All business parameters are showing good growth in Q3 FY22.

Some days of January were affected due to Omicron Variant. But Company is confident of achieving good growth in Q4 FY22 and in the next year. 

Total outstanding Loan Book is 2,43,412 crores as on 31 December 2021. A growth of 12% Y-o-Y.

Individual Home Loans portfolio grew by 15% Y-o-Y. It is showing healthy signs of growth and the same growth can be expected in the upcoming quarter as well. Growth was 34% for the nine months period and growth was seen across all geographies.

80% of the total portfolio was towards housing loans as against 77% Y-o-Y. Growth was seen in all the segments and across all the geographies, especially in Tier 2 and Tier 3 cities.

Achieved a level of 135% of pre covid levels in terms of Q3 disbursements when compared with Q3 of Last year.

Asset quality would continuously improve over the coming quarters.

Disbursements in Individual home loans were 15,341 crores as against 14,511 YoY. Total Disbursements were 17,770 crores in Q3 FY22 a growth of 5%.

Net Interest Income at 1,455 vs 1,281 crores YoY. NIM at 2.42% against 2.36% YoY.

Reduction in cost of borrowings of 7 basis points in Q3 FY22.

Incremental cost of borrowings is at 5.27% in Q3 FY22.

No major reversal of interest in this quarter, hence good growth has been seen in Net Interest Income of the company.

Asset Yields have been stabilizing and Company has increased the lending rates In Jan 2022 which will help the company to have more yields in the upcoming quarters.

Restructuring is only 490 crores in Q3 FY22.

For every 100 crores of reversal of interest there is an impact of 16-17 basis points on NIM’s.

OTR’s are almost 3.25% of the total loan book. Because of OTR’s there can be an increase in provisions in the coming quarters.

NPA’s are comfortable now when compared to previous quarters and in terms of Asset quality as well.

Collection efficiency at 99% in all the regular accounts and the same to be maintained at 97-99% in the upcoming quarters.

Stage 3 EAD are 5.04% against 5.14% QoQ. Total provisions of 5,715 crores.40% Coverage In stage 3.

Provision includes 327.31 crores for Covid 19 provisions.

Assets classified as NPA as per RBI circular are 2,497 crores and are in Stage 1 and Stage 2. ECL provision for the same is 230.83 crores.

Developer loan portfolio saw stable growth in the quarter and company believes that huge room for growth exists in this segment.


Collaborations and Tie-ups:

More than 1 million downloads of homie app has been made so far. 13,000 crores loans have been approved through this homie app.

Company to continuously make expenditure across digital front.

Company had a tie up Indiapost payment bank for its loan disbursements in affordable housing segment.

This tie up will help the company to increase its reach in Tier 2 and Tier 3 cities.

Continuously monitoring tie-ups and collaborations. Few are currently in the pipeline and company are open if there are any such new opportunities to increase its reach and presence.

 
Governmental Support:

Better support from the government is received till now and the same is expected to be received in the affordable housing segment in the upcoming years.

Better prospects are expected in the affordable housing segment owing to better budgetary allocations from the government in the future.

No challenges are been seen for this segment in the future 3-5 years


Please find attached for detailed analysis.
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