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Our Bureau

Mumbai, Jan. 25

Strong loan growth enabled LIC Housing Finance to report a 14 per cent rise in net profit at Rs 153.58 crore for the third quarter ended December 2009. The company had reported a net profit of Rs 134.33 crore in the year-ago period.

Loans sanctioned in the quarter rose 72 per cent, while disbursals were up 86 per cent.

“Disbursements have been strong across the country. The upward movement in the stock markets has had a positive impact on the realty sector. We have seen strong demand from such centres as Bangalore, Hyderabad, Chennai, Mumbai, Delhi and Pune,” said Mr R.R Nair, Director and Chief Executive, LIC Housing Finance.

Mr Nair said that builders have realised that there are no takers for unreasonably priced houses. Net interest margin was down by 50 basis points at 2.73 per cent (3.23 per cent). Cost of funds came down to 6.98 per cent (10.64 per cent).

“We have passed on the benefit of lower interest rates to our customers, which has impacted margins. However, the margins will improve in the fourth quarter and we should be able to maintain an interest spread of 3 per cent for the fiscal,” Mr Nair said.

Mr Nair does not expect interest rates to move up in the fourth quarter even if the Reserve Bank of India hikes CRR. Net NPAs were up marginally to 0.77 per cent as against 0.73 per cent in the corresponding quarter last year.

LIC Housing Finance scrip ended at Rs 794.65 on the BSE on Monday, down 0.4 per cent from the previous close of Rs 797.85.

More Stories on : Financial Performance | Housing Finance

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