PNB Housing Finance eyes a big chunk of affordable housing, aims for 19% growth in FY25, says MD & CEO

The retail focused HFC is looking at opening 50-60 branches this fiscal and most of them would be in areas with strong demand for affordable housing, Kousgi said.

PNB Housing Finance, the listed housing finance arm of Punjab National Bank, is aiming to grow its affordable housing book by 19 percent in the fiscal year 2025, its managing director and chief executive officer Girish Kousgi said.

The retail focused HFC is looking at opening 50-60 branches this fiscal, most of them in areas with strong demand for affordable housing, Kousgi said.

Additionally, the company is also looking to grow its corporate book, which as of June 30, 2024, stood at around Rs 30 crore, he said. Edited excerpts:

How was the first quarter for PNB Housing Finance?

The first quarter shows a mixed trend. In terms of growth, we reported a good quarter with overall 19.3 percent growth. On our asset quality front, our gross non-performing assets (GNPA) came down from 1.5 percent to 1.3 percent in this quarter. For the last two years, we have been focusing more on retail where we have seen good numbers. We are expecting around 17 percent growth in our retail business.

What’s happening on the margin front?

Our net interest margin (NIM) is quite stable and earlier we had guided our NIM to be around 3.5 percent. Currently, we are at 3.65 percent. We expect to maintain this for at least two to three quarters.

Several things like our expansion to corporate and more business in PM Awas Yojana can help us maintain steady NIMs.

What is the plan on affordable housing?

We saw Union Finance Minister Nirmala Sitharaman announce several measures for the affordable housing space. We see this as a big opportunity for the sector and PNB Housing Finance.

The Budget has increased the allocation towards affordable housing schemes and we think this would be beneficial for the sector. Our more than 300 branches will closely see growth opportunities in this space and we are looking at growing our book by 19 percent in this fiscal.

What is your branch expansion plan for this fiscal year?

We plan to open around 50-60 branches in this fiscal. We will be focusing on opening branches in geographies where there is more demand for affordable and emerging markets.

Do you plan to restart corporate lending?

As of June 30, 2024, our overall book is around Rs 67,000 crore and the corporate book is very small as we only have one client. We plan to start corporate lending now but in a very small way.

But earlier you had some trouble in your corporate portfolio...

Previously, corporate loans were not administered with sufficient rigour, leading to a high level of NPAs. Moving forward, we will restart our corporate loan offerings in the second half of the year, with a refined focus on select projects and builders, ensuring that each decision is made after thorough and careful analysis. The corporate book will be smaller compared to the retail book.