NEW DELHI, Feb 25: LIC Housing Finance, the mortgage arm of insurance behemoth LIC, is expecting a net profit of Rs 5,000 crore in the current financial year on the back of robust loan demand and expansion in non-core business.
The non-core business includes Loan Against Property (LAP) and affordable housing finance, LIC Housing Finance managing director and CEO Tribhuwan Adhikari told PTI in an interaction.
During 2022-23, the biggest housing finance company earned a net profit of Rs 2,891 crore.
“Affordable housing segment remained strong in tier-2 and tier-3 markets. We remained focused on this segment, as it gives an opportunity to millions of aspiring Indians to own their home with a moderate budget,” he said.
In addition to business growth, he said, “our endeavour has been to improve service standards through ongoing digital transformation of our processes.”
Fourth quarter is usually the most important business period for the company and going by the current trends, he said, “we expect to close this financial year with healthy numbers.”
He said the company has earned a net profit of Rs 3,675 crore in the three quarters and hopes to touch Rs 5,000 crore by the end of this financial year.
Net Interest Margin (NIM) for the quarter ended December 31, 2023 was 3 per cent as against 2.41 per cent on December 31, 2022.
However, he presented a slightly conservative outlook of 2.6-2.8 per cent NIM during the fiscal ending March 2024 due to high cost of funds.
Cost of funds are elevated due to high interest rate.
Asked about capital requirement to finance business growth, Adhikari said, there is no immediate requirement of funds as Capital Adequacy Ratio is close to 20 per cent.
CAR of LIC Housing Finance rose to 19.77 per cent at the end of December 2023 as compared to 17.74 per cent at the end of third quarter of previous financial year. (PTI)
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