The Hindu Business Line : SBI clocks 50 pc growth in housing loan portfolio

STATE Bank of India, one of the top three lenders to the housing sector, has clocked a growth rate close to 50 per cent in its housing loan portfolio in the fiscal ended March 2003.

As on February, SBI's total housing loan outstanding stood at Rs 11,729 crore as against Rs 8,200 crore at the the end of March 2002, registering an increase of 43 per cent.

Though figures for March are yet to be compiled, indications are that the loan portfolio would have gone up by another Rs 700-800 crore.

However, the rate of growth was higher at 66.5 per cent in the previous year from Rs 4,924 crore as on March 2001 to Rs 8,200 crore on March 2002.

``The rate of growth in percentage terms may be lower in the current fiscal, unless we computerise more branches and push the product through more of our branches,'' said a senior official in the bank. The drop in the percentage growth figures is due to the fast expanding base and repayments coming in, he explained.

The bank has ambitious targets for the year ahead as do most other banks and housing finance companies.

For the fiscal 2003-04, SBI aims to grow its housing loan cake by over Rs 5,000 crore. This would mean a cumulative portfolio of Rs 17,000-18,000 crore.

The core geographical regions of growth for the year 2002-03 for the bank remained restricted to cities. Maximum amounts were disbursed in Mumbai at Rs 560 crore, Rs 525 crore in Hyderabad, Rs 357 crore in Delhi and Rs 342 crore in Chennai.

Analysts expect the housing boom to continue for the coming few years unless the tax incentives for borrowers are done away with or interest rates shoot northward.

LIC Housing Finance, a top rung player in the housing loan market, ``aims to grow its total portfolio substantially by a whopping 150 per cent i.e. Rs 5,000 crore in the coming fiscal to touch a cumulative of Rs 8,000 crore from Rs 3,190 crore as on March 2003,'' said a senior official in LIC Housing Finance.

The growth for the year ended March 2003 was by 62 per cent to touch Rs 3,190 crore from Rs 1,962 crore as on March 2002. In the year prior to that the growth was by 22 per cent.

With net non-performing assets averaging as low as 1 per cent in the housing business, risk spread over a cross-section of customers and margins being squeezed on the premier corporate lending front, banks are in full steam to expand the housing loan market.

On the other hand bankers also caution that ``NPAs tend to appear only after 2-3 years, once the initial enthusiasm of the borrower dies down.''

The Reserve Bank of India recently cautioned banks to tone down their aggressive lending in this sector.

There are also reports surfacing of a builder-borrower nexus operating armed with fake title deeds and non-existent mortgage property.

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