Loan growth and recoveries drive six folds increase in LIC Housing's earnings

5 Aug 2022 , 08:03 AM

In the quarter that ended in June 2022, LIC Housing Finance’s profit after tax multiplied six times to Rs925 crore from Rs153 crore, driven by an increase in individual loans, lower impairment charges as a result of declining non-performing assets (NPAs), and a rise in net interest margin (NIM).

At the end of June, the value of home loans to people increased by 15% year over year, reaching Rs2.09 lakh crores.

Profits increased as impairment expenses dropped 63% to Rs308 crore from Rs830 crore a year earlier. Gross NPAs decreased from 5.93% as of June 30, 2021, to 4.96%.

NIM, or the distinction between the yield on loans and the price paid for funds, increased to 2.54% from 2.20% a year ago.

The cost of funds decreased from 6.88% to 6.70% during the past year.

The firm’s portfolio of project loans decreased by 20% to Rs12,443 crore as of June 30, 2022, from Rs15601 crore a year earlier.

The company has improved its earnings compared to last year, according to CEO Viswanatha Gowd, thanks to a 99% collection efficiency despite a significant decline in revenue last year and typical economic activity.