LIC Housing Finance stop loans to realtors
In a bid to undo the damage caused by the recent loan bribery scam, LIC Housing Finance (LICHF) has stopped financing project developers, according to a top official.
He, however, said the company would resume lending but added that loans would be approved on a case-to-case basis.
“We have not done any project financing and also stopped loans to individual developers. This has resulted in a slight decline in loans sanctioned during the quarter sequentially,” LICHF Chief Executive VK Sharma told Business Standard over telephone.
The mortgage lender, declaring the results for the first time after being hit by the bribery scam late last year, sanctioned loans worth Rs 5,785 crore in the quarter, as against Rs 7,667 crore in the second quarter, a fall of 24.54 per cent.
“We had to re-assess the overall system and individual portfolios on a case-to-case basis. Things are now more or less in order,” he added.
He said the company would resume lending to real estate developers but on a priority basis.
“The first priority will be given to customers with a proven repayment record. As far as new applicants are concerned, we will study on a case-to-case basis,” Sharma said.
The real estate exposure of the company stood at around Rs 5,000 crore on a total loan book of Rs 46,380 crore. Going forward, the exposure would be 10-11 per cent of the book size, he added.
The company plans to expand its business at 35 per cent in the current quarter and would raise Rs 8,000-10,000 crore.
“The money will be raised mostly through non-convertible debentures (NCDs) and term loans. At present, the average cost of borrowing is 8.12 per cent,” Sharma said.
Earlier in the day, LICHF declared a standalone net profit of Rs 213.49 crore for the December quarter, as against Rs 153.58 crore in the year-ago period, up 39 per cent.
The total income rose 54 per cent to Rs 1,354 crore, as against Rs 881 crore in the corresponding period a year ago.
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