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Last Updated : Jul 29, 2016 09:47 AM IST | Source: CNBC-TV18

Loan growth to stabilise around 30% FY17 onwards: Can Fin Homes

SK Hota, Managing Director, Can Fin Homes, expects the loan book to be around Rs 13,500 crore at the end of this financial year, which works out to an increase of 29 percent year-on-year

Can Fin Homes recorded around 40 percent year-on-year growth in loan book for the last two years. Speaking to CNBC-TV18, SK Hota, Managing Director, Can Fin Homes, says he expects the loan growth to stabilise around 30 percent this fiscal onwards. 

He expects the loan book to be around Rs 13,500 crore at the end of this financial year, which works out to an increase of 29 percent year-on-year.  

The company's asset quality is very good, says Hota, with a small rise in NPAs in the first quarter of FY17. Net non-performing assets were at 0.04 percent of the loan book in Q1.

Hota said the company is well capitalised, but may start raising capital next year.

Below is the verbatim transcript of SK Hota's interview to Ekta Batra and Prashant Nair on CNBC-TV18.

Prashant: Growth rate has come down from 40-50 percent levels to about 28-30 percent levels. Can you just talk to us a little about that?

A: FY17 we have given a guidance of Rs 13,500 crore that amounts to the something like 28-29 percent year on year (YoY) and this 40 percent plus growth rate what you are telling is it was there in last to last year and the previous year we have witnessed such growths. Yes, last year it was something like 29 percent, going forward we can always anticipate there is a base effect for sure as our loan book grows, essentially somewhere the growth rates will be stabilising around 30 percent. This is fair enough for us, we are happy with these growth rates.

Ekta: Just wanted to touch upon the loan against property or the LAP segment, which is heating up due to a high number of players we understand. Can you talk a little more about that as well as what your view is in terms of asset quality from that segment?

A: If you have seen my numbers, the net non-performing assets (NPAs) is 0.04 percent and the gross NPAs is 0.24 percent compare to last year, Q1 increase if you see the rise in NPA it is very, very minimum. Last year there was increment of something like Rs 8.5 crore, this time we have contained it at something like Rs 7.4 crore.

So asset quality wise, we don’t have any difference as far as housing and non-housing are concerned. Non-housing are doing pretty well for us. Non-housing, I told you the total is 12 percent less than half of that is LAP, if you say for that matter even the builder loans my portfolio is very, very minimum it is something like 0.24 percent of my total portfolio.

Prashant: Do you have plans to raise capital in financial years 17 or 18 and also there has been some talk that Canara Bank might dilute their stake, they hold 43.5 percent, your thoughts?

A: The capital adequacy of Can Fin, the tier 1 itself is something like 16.7 percent, so the internal accruals are good enough. As far as the current year loan book is concerned, we don’t require anything, we are pretty well capitalised.

Going forward maybe next year sometime in FY17-18 will be starting to think of raising the capital and when it comes to the Canara Bank’s stake, Canara Bank is our promoter and they are holding 43.5 percent as of now. There is not much of discussion as of now, as far as there is no discussion with regard to dilution, I am listening from the market only. If at all anything is there, I will come back to you and certainly I will share with you.
First Published on Jul 28, 2016 12:45 pm