PNB Housing Finance on January 23 reported a 21.8 percent de-growth in the third quarter profit at Rs 297.1 crore YoY with a sharp deterioration in asset quality. The company’s profit was impacted by higher provisions, lower operating income, but supported by lower tax cost.
Net interest income (NII) during the quarter grew by 11.8 percent year-on-year to Rs 566 crore, but loan growth was negative (2.2 percent) with net interest margin at five-quarter low of 2.98 percent.
On the asset quality front, gross non-performing assets (NPA) as a percentage of gross advances increased to 1.75 percent (from 0.84 percent QoQ) and net NPA to 1.44 percent (from 0.65 percent QoQ).
Provisions and contingencies jumped to Rs 180.8 crore from Rs 70.1 crore from the year-ago period and Rs 151.6 crore from the previous quarter.
Here are highlights of the PNB Housing Finance's analyst call, collated by Narnolia Financial Advisors:
Management Participant: Deepika Gupta Padhi-IR
In the third quarter, PNB Housing raised NCD from LIC amounting to Rs 2,500 crore with a maturity of 10 years. The deposit mobilised over nine months stood at Rs 7,500 crore, with a tenure ranging from 30 to 36 months.
For All Earnings Related News - Click Here
The current yield of the portfolio is at 10.86 percent, with the LAP interest rate at 10.44 percent, the Home loan is 9.52 percent, retail 9.84 percent, corporate yield 12.50 percent, CF is at 12.33 percent, CTL (corporate term loan) & LRD 10.44 percent. The spreads for 9MFY20 are 2.12 percent versus 1.93 percent YoY, with a healthy yield of the portfolio. The higher share of liquidity & securitisation will lead to NIM pressure.
The company has securitised through the direct assignment route. The corporate finance account was sold up to Rs 1,963 crore in 9MFY20.
Management has guided AUM growth to be in 15-18 percent range for the next three years and retail disbursement to be in the Rs 1,700-1,800 crore run rate.
PNB Housing maintained liquidity to the tune of Rs 9,268 crore. It will take care of liquidity for 130 days.
The management has guided to keep the gearing ratio at 7-7.5x raise, with no equity raised till 2023.
The corporate book has a natural runoff of 15 percent without considering Rs 1,963 crore of LRD.
The loan outstanding on five accounts stands at Rs 908 crore to Rs 819 crore as at Q3FY20. It has provided 37 percent of provisioning in these 5 accounts. The Steady-state provisioning stands at Rs 168 crore.
New accounts under stress are IBL PVT ltd, Radius and Supertech, with a total exposure to these accounts at Rs 604 crore.
Supertech moved into NPA in Q1FY20, while the company has planned a structured repayment plan, as a result, the developer paid Rs 49 crore resulting in principle outstanding to reduce to Rs 101 crore (PCR 37 percent).
Radius and Supertech have moved NCLT. The Supertech exposure stood at Rs 244 crore, with ECL provision at 38 percent.
Radius has an exposure of Rs 359 crore with PCR standing at 39 percent. PNB Housing has raised Rs 635 crore to the developer for three projects in Chandigarh and Lucknow, now the outstanding amount is Rs 418 crore with security coverage of 2.3x.
Exposure to Omaxe is in buckets 1. Exposure to Lodha group stood at Rs 1,250 crore. ECL provision stands at 36 percent for Ornade (Stage 2) with exposure Rs 181 crore. Waterfront exposure is an NPA, the outstanding has come down to Rs 34 crore with ECL provision of 16 percent.
The management is confident of resolving the IBL and Waterfront exposure by Q4FY20.
PNB has guided to keep at a 26 percent shareholding while ensuring its subsidiary has sufficient capital. PNB says it does not plan to sell PNB Housing.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
