LIC Housing Finance (LHF) held its conference call on 24th April 2009 to discuss its Q4FY09 and FY09 results.
Highlights
- LHF reported 30% growth in Income from operations to Rs 790.48 crore. With higher rise in interest expenses, the gross profit recorded a restricted growth of 21% to Rs 218.59 crore. The Net profit for the quarter stood at Rs 157.56 crore, up by 33%.
- The Outstanding Mortgage Portfolio as on March 31, 2009 was Rs 27679 crore as against Rs 21936 crore on March 31, 2008, thus registering a growth of 26%.
- More than 96% of the total portfolio is floating.
- Sanctions grew by 22% to Rs 3539 crore and disbursements increasing by 21% to Rs 3139 crore for the quarter ended Mar’09. Out of the disbursements Rs 2474 crore is for individuals and Rs 665 core is for project loans.
- For the full year ended Mar’09 the sanctions recorded a growth of 26% at Rs 10898 crore and disbursements recorded growth of 24% to Rs 8762 crore. Out of which Rs 7355 crore are individual loans.
- Almost 58% of the disbursements come from 10 major tier I and II cities.
- 7-8% of the disbursements form part of switching loans from other borrowers.
- The Gross NPA as on 31.3.2009 stood at Rs 297 crore as against Rs 373 crore as on 31.3.2008, a reduction of 20%. The Gross NPA of the Company stood at 1.07% on 31.3.2009 as against 1.70% as on 31.3.2008. Net NPA were 0.21 % as against 0.64 % for the corresponding dates.
- The gross NPA for project loan came down to 0.1% compared to 0.23% last year.
- The provision cover on the NPA stood at 81% as on 31.3.2009.
- The total write offs for the year stood at Rs 5.04 crore compared to Rs 39 crore in FY08 and the same for the quarter ended Q4FY09 stood at Rs 4.95 crore compared to Rs 9.01 crore in Q4FY08.
- Company does not compromise on the quality of customer, hence has low NPA. Company is taking necessary steps to bring down the default rate. Credit rating application and close monitoring mechanism has been started. Company does not give balance sheet loans.
- The Net Interest Margins for the whole year stood at 2.95% compared to 2.80% a year ago.
- The spread for the whole year also improved from 1.57% to 2.05% for FY09.
- Borrowing as on Mar’09 stood at Rs 25405 crore of which 50% is floating and 50% is fixed.
- The cost of funds on an average has increased from 8.85% to 9.15% for FY09 and on incremental basis it stands at 10.04%. However with low rates prevailing now the company is able to get funds at much lower levels at 6.08%, so it expects the cost of funds going down in forthcoming quarters.
- The average yield on advances has increased from 10.42% in FY08 to 11.20% in FY09. The incremental yield stands at 12.01%.
- The yield for builders for full year stands at 14.5%.
- The capital adequacy ratio increased from 13.34% in FY08 to 15.79% as on FY09 (well above regulatory measure of 12%).
- The Board of Directors have recommended dividend of 130 %.
- The Book value per share improved over a period of year from Rs 215 per share in FY08 to Rs 265 per share in FY09.
- LIC housing has introduced special scheme at rate of 8.75% in Feb’09. This scheme being linked to the PLR which will be revised every quarter will not have so much effect on the profitability of the company.
- Slippages in loan down from Rs 373 crore in FY08 to Rs 279 crore in FY09.
- Investments stood at Rs 88.62 crore as on FY09.
- The secured loan stands at Rs 25000 crore as on FY09. Source of funds- Bank term loan (28%), NHB (9%), NCD (53%), others (3%), and LIC term loan (7%).
- 113 marketing office now and the company is planning to open 26 more new offices by FY10.
- LIC Housing Finance expects 25% minimum growth in disbursements and loan portfolio for FY10. Also it expects to maintain its NIM to be at current levels. Expecting similar profit growth during current year.
- The company is confident that the next one or two quarters will be good for them given improved demand owing to soft interest rates and falling property prices.