Tag: Shriram Housing Finance

Hiring in banks up 25% to cater to rising loan demand, BFSI News, ET BFSI

Banking & Finance

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Banks are stepping up hiring to cater to the growing demand for home loans. Hiring has gone up 22-25% in the last few months across urban and rural markets as demand for home loans has surged, according to various reports.

About 90 per cent of the requirement is in the sales function, with starting salaries of Rs 15,000 to Rs 20,000, along with incentives. Hiring is across the board at NBFCs, small finance banks and non-banking finance companies, and hiring costs are rising as employees are shifting jobs within the sector.

NBFCs

Shriram Group is hiring 5,000 across its many companies, while ICICI Home Finance is looking to onboard 600 employees by December.

The Shriram Group is recruiting mainly in south and north India, across tier 3-4 cities. Shriram City Union Finance is expanding its gold loan business,

while Shriram Housing Finance is expanding primarily in Andhra Pradesh and Telangana.

Banks

HDFC Bank is aiming to reach 200,000 villages in the next 24 months, and plans to hire more than 2,500 people in the next six months.

The bank aims to double its presence in the next 18-24 months through a combination of branch network, business correspondents, business facilitators, CSC (common service centres) partners, virtual relationship management and digital outreach platforms.

The bank will hire 500 relationship managers to expand the coverage of its Micro, Small and Medium Enterprises (MSME) vertical to 575 districts or more by the end of this fiscal. Out of these, half will be for the small and medium sub-vertical, which already has a headcount of 975. This hiring will take the private bank’s MSME vertical headcount to 2,500. India’s largest private sector lender had an employee strength of around 1.23 lakh as of June.

Credit Suisse has plans to hire over 1,000 staff in India this year for a technology innovation office, while Deutsche Bank is looking to hire 1,000 people in India, including 300 graduates and 700 lateral hires. Meanwhile, Kotak Mahindra Bank has resumed its hiring process, and has reached near pre-Covid levels.

Data analysts

From banking to FinTech companies, data analysts are in demand. These companies are looking for professionals who can handle data using technology and glean relevant information from it.

FinTechs are also beefing up marketing and sales teams and are looking beyond commerce and engineering backgrounds with a background in data analysis, artificial intelligence and exceptional soft skills. They are looking to pay higher salaries who have Big Data, advanced analytics and financial skills.



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Banks, NBFCs, FinTechs hire as economic revival strengthens, BFSI News, ET BFSI

Banking & Finance

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Banks and non-banking finance companies are stepping up on hiring plans in anticipation of growth in the economy and improve their digital footprint. Some banks intend to step up hiring by 30-35% over the last year.

HDFC Bank ramp-up

Private lender HDFC Bank, which aims to reach 200,000 villages in the next 24 months, has plans to hire more than 2,500 people in the next six months,

The bank aims to double its presence in the next 18-24 months through a combination of branch network , business correspondents, business facilitators, CSC (common service centres) partners, virtual relationship management and digital outreach platforms.

HDFC Bank will hire 500 relationship managers to expand the coverage of its Micro, Small and Medium Enterprises (MSME) vertical to 575 districts or more by the end of this fiscal. Out of these 500 recruits, half will be for the small and medium sub-vertical, which already has a headcount of 975. This hiring will take the private bank’s MSME vertical headcount to 2,500. India’s largest private sector lender has an employee strength of around 1.23 lakh as of June end.

NBFCs hiring

Shriram Group is hiring 5,000 across its many companies. ICICI Home Finance is looking to onboard 600 employees by December while Kotak Mahindra Bank, too, has resumed hiring closer to pre-Covid levels.

The Shriram Group is recruiting mainly in the south and north India, across tier 3-4 cities. Shriram City Union Finance is expanding its gold loan business,

while Shriram Housing Finance is expanding primarily in Andhra Pradesh and Telangana.

Credit Suisse has plans to hire over 1,000 staff in India this year for a technology innovation office. Deutsche Bank is hiring 1,000 people in India, including 300 graduates and 700 lateral hires.

FinTech hiring

From banking to FinTech, companies are looking to hire with the biggest demand for data analysts, who can handle data using technology and glean relevant information from it.

The FinTech firms are also beefing up marketing and sales teams and are looking beyond commerce and engineering backgrounds with a background in data analysis, artificial intelligence and exceptional soft skills. They are looking to pay higher salaries who have Big Data, advanced analytics and financial skills.



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‘CFOs should keep eye on long-term strategy, adapt to short-term situations’, BFSI News, ET BFSI

Personal Finance

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CFOs have to play a major role during the pandemic in their organisations and be ready from the technology and business perspectives.

All eyes are on the P&L projections and the growth expectations from the businesses. With various factors that have come out of the pandemic, I would imagine that CFOs are at the centre with all the strategies that organizations are playing right now, Sudeep Bhatia, Group CFO, Lendingkart, said at the panel discussion CFOs’ View: Building Pandemic-Proof Balance Sheet at ETBFSI Summit.

'CFOs should keep eye on long-term strategy, adapt to short-term situations'

“For CFOs, the major focus has moved more towards a strategist, acting as a catalyst. How you can adapt to every day. Making sure you are ready from a technology and business perspective,” Upma Goel, CFO, Ujjivan Small Finance Bank, said.

'CFOs should keep eye on long-term strategy, adapt to short-term situations'

Adapting to new normal

Niraj Shah, CFO, HDFC Life said in these times, flexibility and agility is something that comes to the fore, and that’s something that a CFO needs to prepare the organization for.

Investing ahead of the time, and being agile, to try and adapt to the changing customer preferences because of the changing environment, he said.

'CFOs should keep eye on long-term strategy, adapt to short-term situations'

The RBI and GOI have taken multiple steps and interventions with every step, and, therefore, all the financial institutions, and all other organizations as well, had to adapt to the situations very fast, Bhatia of Lendingkart said.

Every business will be affected in a different way. Given the situation, and we adjust to that, but just in principle it’s about keeping sights on your long-term strategy, at the same time, adapting, to the short-term situations, Shah said.

Emphasising the need to have a fine balance to make effective use of the liquid cash, Goel of Ujjivan SFB said, “We cannot afford at this point of time not to have the liquidity and wait for the real demand. Demand has started picking up”

The challenges

The Covid pandemic has been the most serious challenge to financial institutions in nearly a century and CFOs need to maintain our distribution and recovery channels open, despite the social distancing advice by the supervisory and compliance function, said G S Agarwal, CFO, Shriram Housing Finance.

'CFOs should keep eye on long-term strategy, adapt to short-term situations'

‘The struggle to manage between these things and keep your balance sheet and P&L intact has been the biggest challenge. Also, to do the compliances remotely sitting remotely without any paperwork, without any physical signatures has been quite challenging, he said.

Customer requests and expectations have grown multifold. “I haven’t seen this kind of customer engagement before even from the existing customer base. This is because they need support from the organization as well,” Bhatia of Lendingkart said.



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‘Won’t need significant loan recast as market has improved’

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Shriram Housing Finance MD & CEO Ravi Subramanian

For Shriram Housing Finance (SHFL), which has completed a decade of operations, the second quarter this fiscal promises to be one of the highest quarters ever in terms of disbursements, says its MD & CEO Ravi Subramanian. In an interview with Mithun Dasgupta, Subramanian says the company would not need “significant” loan restructuring going forward as the market has improved. Edited excerpts:

How is the demand for housing loans after the second Covid wave in comparison to the first one?

After the first Covid wave, a lot of pipeline transactions just went on hold from March to May. People who came into the market in June saw a huge uptake from July (2020) onwards. In the last financial year, the third and fourth quarters were very good for most housing loan players. We also did record numbers as our disbursal last year was 95% more than the previous year.

This fiscal, there was a slowdown in demands. The pick-up has not been of the same nature as last year. Nevertheless, in July (2021), the business was back to last year’s pick levels. Demand for housing has picked up. I just hope that it sustains.

What percentage of housing loan demands are coming from people who already own houses?

There is around 10-15% increase in the number of persons who are building additional rooms in their existing houses, which means that people are going in for expansion. We have also seen a lot of people, who already own a house, coming in to buy a slightly larger house and clearly expressing an intent that they would sell off the old house to meet the liabilities. That too was a 10-15% increase over the previous quarters. So, there is an increase, there is a definitive shift towards people going in for larger properties.

SHFL’s disbursements for Q1FY22 stood at Rs 221 crore, against Rs 77 crore for the same period of FY21. What will disbursements look like going forward?

Q1FY21 was a very slow quarter. April and May this year was a washout. In June, we were back to about 80% of our normal disbursal. In July, we were back to our last year’s numbers. So, we are very much back on track in June and July, which means that business has picked up significantly. My company has grown through Covid-19, in the sense that my numbers before Covid were not as high as there are now. Pre-Covid, one year was a period of investment for us.

We had started transforming the organization, started growing the book, started building the distributions. So, we were on the growth path when Covid hit us. Q2FY21 was the first time our company crossed `500 crore disbursal in a quarter. This year, in July we already clocked `225 crore disbursal, which was about 30% more than what we did in June. Thus, for the company, Q2FY22 promises to be one of the highest quarters ever, if I go by the July trajectory.

What are the factors that contributed to the growth in numbers?

We had transformed the organisation in terms of areas of focus, customers segments and the products that we wanted to launch sometime in Q4FY19. After that, we have been investing in our teams and focusing on six states in south and west, and building our books. We aspire to hit about `400-500 crore in about 24 months, which we will. Today, we are one of the largest housing finance players in terms of growth in disbursal, assets under management, profitability and the portfolio quality of the new book. The portfolio quality of the new book is roughly about 77% of our total book, which is the best in class (in affordable housing loan) today. We believe in slow and steady growth.

What was the number of loans the company restructured in the first quarter?

In Q1FY22, we restructured around Rs 72 crore of loans. In the previous quarter, we had restructured loans of Rs 58 crore. Total, we have restructured roughly 3% of our book, out of which about 1.4% was in current up to 30 days when we restructured. So, it is not that we only restructured delinquent customers and higher bucket customers, but also genuine customers who had been paying and were going through some stress.

Collections in our restructured book are also very good. In fact, in July, on the new book, roughly 99% of our customers paid one EMI at least. I don’t think that we will be restructuring anything significant going forward because the market has improved.

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Shriram Housing Finance Q1 net profit up 82%

Banking & Finance

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Shriram Housing Finance reported an 81.8 per cent rise in its net profit to ₹10.87 crore for the first quarter of the fiscal as against ₹5.98 crore a year ago.

Its total revenue from operations shot up by 62.4 per cent to ₹115.39 crore in the quarter ended June 30, 2021from ₹71.06 crore a year ago.

Assets Under Management (AUM) grew by 65 per cent to ₹3,910 crore on a year-on-year basis. However, disbursements for the first quarter of the fiscal were subdued at ₹221 crore, impacted by state level lockdowns.

Asset quality improved marginally with gross stage 3 assets declining to 2.32 per cent as on June 30, 2021 compared to 2.34 per cent for same period last year.

“Restructuring has been contained at 1.8 per cent of the book during the second wave of Covid, while in the first wave restructured book was 1.5 per cent,”it said in a statement.

Impairment on financial instruments rose to ₹1.33 crore in the first quarter of the fiscal.

“As the fear of Covid recedes, we will embark on our growth plans and expand our branch network. We also intend to expand ‘Griha Poorti’, our cross sell program through the Shriram City branch network and aim to cover over 170 distribution points of Shriram City by March 2022. This program will strengthen our AUM growth over the next four to six quarters,” said Ravi Subramanian, Managing Director and CEO, Shriram Housing Finance.

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Growth agenda back on the table: Ravi Subramanian, MD and CEO of Shriram Housing

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The demand for housing is back after the second Covid wave and overall tailwinds are positive, believes Ravi Subramanian, Managing Director and CEO, Shriram Housing Finance. In an interview with BusinessLine, he said the company is looking at faster growth after the performance in June. Housing finance companies should be allowed to charge prepayment penalty in initial years, he further said. Edited excerpts:

How is the demand for housing post the second Covid wave?

Demand is back. In June, we did 80 per cent of our regular disbursals. Collections were back on track and we collected from almost 99 per cent of the customers we had originated in the last three years. It has improved further in July. The cheque bounce rates have reduced and in July were the lowest in the last 12 months. People are now reconciled to Covid, business is getting back on track. If we get another two months, business will be back roaring across the country.

Which are the segments where there is demand?

We are seeing a lot of demand in Tier 2 and Tier 3 towns. People are expanding their houses. Self-construction is giving us good volumes. Smaller and affordable housing projects are seeing a fair bit of traction. There is a lot of demand in the Rs 20 lakh to Rs 25 lakh segment, and the higher end of the spectrum, which is absolute ultra luxury. Our NPAs are well under control. NPAs had deteriorated by about 20 basis points in April, May and June. But given that our collections have picked up and bounce rates have come down, I expect September to be a far better quarter.

What kind of growth are you targeting?

Last year, the Covid impact stayed till the end of the first quarter. We started disbursing at the end of July and early August. Despite that, we grew our disbursals by about 90 per cent last year. This year, disbursals have started in June. If I get a clear runway from now on till the end of the year without a third wave, then disbursals could increase by at least 60 per cent to 70 per cent. Last year, we did about Rs 2,100 crore and this year we will do at least Rs 3,000 crore provided we get a clear runway from now till March. We will end up with assets under management of about Rs 5,500 crore to Rs 5,700 crore. June has brought the growth agenda back on the table.

How do you perceive competition from banks that offer low interest rates?

HFCs should be allowed to charge a prepayment penalty in case the customer moves in the first two-and-a-half to three years. The low interest rates are not much of an issue. There are many critera and not many customers meet it. It is a headline rate. My attrition last year for balance transfers was 9.5 per cent. We have a fairly aggressive retention process where every customer who wants a foreclosure letter is spoken to, their needs are assessed and we try and retain the customer.

How much restructuring have you done?

We did Rs 58 crore of restructuring in the first round on a Rs 4,000 crore AUM. About Rs 26 crore to Rs 27 crore were from customers who were current and not delinquent. In round two, we did a similar number of Rs 58 crore to Rs 60 crore of restructuring. So my total restructuring is about about 2.6 per cent of my total book.

Are you looking at any acquisitions?

We were interested in an HFC buyout earlier this year but the target company pulled out at the last stage. We will be happy to look at acquisition opportunities for an HFC with an AUM of over Rs 1,500 crore. If we don’t get a good acquisition opportunity, we will build it.

What is your strategy for expansion?

We are looking at faster growth now. Last year, we opened 26 branches of Shriram Housing co-located with Shriram City Union Finance in Andhra Pradhesh and Telangana. This year, we had initially planned to get to 100 branches from 26 branches this year. But after our experience in June, we have decided to fast-track it to all branches of Shriram City Union Finance in the two states by September.

Have you become more careful in underwriting customers?

Caution can never be wished away in the lending business. We do not want to do large value loans. We will do restricted LTV. We will not do new to credit customers. There was a time when our new to credit customers were 25 per cent to 30 per cent. Now, it is at about eight per cent to nine per cent. About 80 per cent of our customers have a credit score of more than 700.

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Shriram Housing Finance to get capital infusion of Rs 500 crore from parent, BFSI News, ET BFSI

Banking & Finance

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Shriram City Union Finance has invested Rs 200 crore in its housing finance subsidiary Shriram Housing Finance Limited.
An Additional of Rs 300 crore could be invested over the next two years. The mortgage lender said, “The current infusion of Rs. 200 Cr will increase SCUF’s holding in SHFL to 81.16% from existing 77.25%. The funds will be used to provide growth capital to the fast growing HFC and enable it to expand its distribution network and customer base. The networth of Shriram Housing Finance which was at Rs. 576 Cr as of March 31st 2021, goes up to Rs. 776 Cr with this investment.”

In FY 21, Shriram Housing Finance has reported a growth in its AUM of 70% YoY, with the highest ever quarterly and yearly disbursements of Rs. 1005 crore and Rs. 2195 Cr respectively. The company ended FY 21 with PAT of Rs. 62.4 Cr, a strong 34% growth for the year. The ROA stands at a healthy 2.5%.

Ravi Subramanian, Managing Director & CEO, Shriram Housing Finance said, “We are happy to get incremental growth capital of Rs. 200 Cr from our parent. This capital infusion will help us expand our business and support our growth plans for the next 12-15 months. We have had a great FY21 and with this capital at our disposal, we expect to ride out the second wave of the pandemic and come out stronger in FY 2022. We have always focused on growing our business without compromising on quality and we look forward to continue doing the same. SHFL has forever stayed loyal to its mission of helping people own their dream home.”

Y S Chakravarti, Managing Director of SCUF added, “We are delighted to continue our support to SHFL. It is a dynamic, young and fast growing organisation and the Affordable housing space continues to impress and interest us. SHFL is an integral part of the group growth story and this investment is a testimony to that. The company is now well capitalised and poised for growth.”



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Shriram Housing Finance to provide free vaccination to customers, BFSI News, ET BFSI

Banking & Finance

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In an industry first, mortgage lender Shriram Housing Finance has decided to provide free vaccination to its 20,000 affordable housing customers. The company would roughly spend Rs 1000 per loan as vaccination cost and would cover two members in a family. It estimates to spend nearly Rs 2 crore to provide free vaccination to its customers.

The mortgage lender had earlier announced that it would bear the vaccination cost of its employees.

“Customers in the affordable housing space are not very well off and for them even the small sum to be incurred in vaccination through private players can become a big deterrent, this in turn can derail the vaccination drive,” said Ravi Subramanian, MD, Shriram Housing Finance. “We would be reaching out to all customers with details of this program.”

Several banks including State Bank of India, HDFC Bank, ICICI Bank, Axis Bank have said that they would bear the vaccination cost of employees.

State Bank of India has set up an internal task force to extend immediate assistance to its members.

A Quick Response Team (QRT) headed by a General Manager has been set up at Corporate Centre for monitoring the COVID position at the whole Bank level,” said Rana Ashutosh Kumar Singh, DMD (HR) & Corporate Development Officer, SBI. “Similar teams headed by Deputy General Managers have been set up in all 17 Circles for monitoring the COVID situation in their area and providing assistance to staff and their family members.”

HDFC Bank has converted its training centres in Pune, Bhubaneswar and Gurgaon into isolation centres to deal with Covid-19-related emergencies for employees with symptoms. The bank has also tied up with hotels across the country for rooms.

Some banks have started tying up with doctors who could guide employees in dealing with their Covid-19-related fears. About 1.5 million people are employed across Indian banks.



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