LIC Housing Finance aims to protect NIM first, says MD Adhikari
LIC Housing Finance
is planning to shift its focus beyond individual
home loans
and move the high yielding loan businesses on a faster growth track as it looks to boost margin amid a softer
interest rate
cycle.
Lending to individuals remained bread and butter all these years for the country's largest housing finance company with 85% share of the total loan assets portfolio.
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The company has decided to bring down the share to about 70% in two years' time, managing director
Tribhuwan Adhikari
said Saturday, responding to ET.
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"We would like to boost margin and growth side by side. But if push comes to shove, our first aim will be to protect margin," the MD said.
The lender's
net interest margin
for the first quarter of the fiscal stood at 2.68%, the lowest first quarter margin in two years. The NIM was 2.76% in Q1FY25 and 3.21% in Q1FY24.
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It earned a net profit of Rs 1360 crore for the quarter, as compared with Rs 1300 crore in the year ago period.
"We are moving on to the other
home loan
segments," Adhikari said. Within this, the company is targeting loans against property or loans against deposits.
The company however remained cautious on growing the
affordable housing
loan book which is targeted at the economically weaker segment..
"This is a slightly riskier segment. We are trying to build capacity," the MD said.
The company's outstanding loan portfolio grew 7% year-on-year to Rs 3.10 lakh crore with individual home loan book being at Rs 2.62 lakh crore.
"There is no surge in demand despite rate cuts. Many borrowers are perhaps waiting for the rate cut cycle to be completed to get the full benefit of it," Adhikari said.
"For the salaried class,
interest rates
do play a big role,' he added. The salaried segment accounted for about 90% of the lender's customer base at the end of June.
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