Month: February 2021

Indiabulls Housing Finance reported a 40.3 per cent drop in consolidated net profit for the third quarter of the fiscal at ₹329.32 crore. It had reported a net profit of ₹551.7 crore in the corresponding period last fiscal.

“The board, at its meeting, has also authorised to issue Secured Redeemable Non-Convertible Debentures and Unsecured Redeemable Non-Convertible Subordinate Debt in the nature of Debentures (NCDs) of up to ₹5,000 Crore, on private placement basis, in one or more tranches, from time to time,” it said in a regulatory filing on Friday.

For the quarter ended December 31, 2020, Indiabulls Housing Finance registered a 25.4 per cent dip in total revenue from operations to ₹2,513.25 crore versus ₹3,369.16 crore a year ago.

“On balance sheet loan book stands at ₹70,282 crore on account of developer book run off through refinancing. Retail loan book has grown,” the company said in a statement.

Gross non-performing assets remained moderate at 1.75 per cent as on December 31, 2020, as against 1.98 per cent at the end of the second quarter this fiscal.

“Without the Supreme Court’s dispensation, Proforma Gross NPAs would be 2.44 per cent, compared with 2.21 per cent as on September 30, 2020,” the company said, adding that proforma gross NPA provision coverage ratio stands at 40 per cent.

Indiabulls Housing Finance said access to funding has normalised and its funding costs have moderated with cost of funds on book down to 8.5 per cent.

Disbursals have rebounded, with total disbursals in the third quarter of the fiscal at ₹3,458 crore, of which, retail loan disbursals constituted 75 per cent.

“The company is also seeing good traction in loan co-lending, with disbursals reaching a monthly run rate of ₹200 crore in January,” it further said.

On developer loans sourcing, Indiabulls Housing Finance said it is in talks with two large real estate-focussed funds to set up an investment platform.

Mallikarjuna Rao, MD and CEO, Punjab National Bank, on Friday, said that credit growth is expected to start moving on a higher trajectory from the fourth quarter of this fiscal.

The low credit offtake over the last couple of quarters was primarily due to the laxity of demand in the wake of the slowdown induced by the pandemic. It was not due to the risk aversion of banks as is popularly believed, he said.

“During the pandemic there was laxity in demand and despite the tax reforms in October 2019, there was not much of investments coming in, and this goes to show the poor demand. But now with the good creation of supply and demand, we expect lending will see a higher growth particularly from Q4 onwards,” said Rao, while addressing the Financial Market E-Conclave organised by the Bengal Chamber of Commerce and Industry here on Friday.

Public sector banks play a very important role in the revival of economy and in lending to the infrastructure sector.

Banks not risk-averse

Of late, banks, particularly PSBs, have been blamed for being too risk averse and, hence, choke credit to the economy. However, Rao said that based on the past experiences, banks have enhanced their credit underwriting mechanisms so as to ensure credit quality. This would augur well for the overall ecosystem in the long run.

“It is good that banks are taking precaution on quality of credit,” he said.

According to G Rajkiran Rai, Managing Director and Chief Executive Officer, Union Bank of India, corporate borrowers were accustomed to borrowing more easily without focussing on risk management practices, and now they are finding it difficult as more data is required under the enhanced credit monitoring system.

“So, they are feeling that banks have become risk averse but that is not the case,” he clarified.

This would lead to better underwriting capabilities, better risk management, and eventhough some coprorate customers may find it difficult to go through more rigorous processes, it is good for overall ecosystem.