LIC Housing Finanace year on year growth

LIC Housing Finance posted a slower-than-expected 21% year-on-year growth in its net profit for the April-June quarter. It's PAT came in at Rs 256.50 crore on the back of a sluggish real estate market. Net interest margin (NIM) declined by 67 points to 2.78% (sequentially), suggesting the underlying margin pressure due to rising cost of funds.

The results were majorly below market expectations.

Net interest income rose 23% to Rs 361 crore while income from operations jumped 40% to Rs 1,358 crore from Rs 971 crore YoY.

The director and chief executive said, There has been some sluggishness in real estate transactions in certain parts of the country on account of customers going into wait-and-watch mode.

During the quarter, the company expanded its individual loan disbursements by 15% YoY to Rs 3,468 crore. However, the company's project loan disbursements plunged 79% to Rs 77 crore. Its outstanding loan book grew at 32% to Rs 52,876.

The housing finance company had stopped giving corporate loans after one of its top executives was allegedly involved in a housing loan scam in 2010, which was resumed in March.

The stress in housing finance market was also reflective on the company's asset quality in the first quarter of 2011-12. The gross non-performing assets (NPAs) increased sequentially from 0.47% to 0.84% while the net NPAs rose from 0.03% to 0.35%.