PNB Housing Seeks To Bring Business Loan Book Below Rs 10,000 Crore By March 2022, Real Estate News, ET RealEstate

NEW DELHI: PNB Housing Finance aims to reduce its business loan portfolio to less than Rs 10,000 crore by the end of this fiscal year as it seeks to focus more on retail lending activities, senior official says of the company. The company’s business loans stood at Rs 10,989 crore at the end of the first quarter of 2021-2022, representing 15% of its assets under management (AUM) and these touched Rs 71,828 crore during the past year. the same period.

However, loan assets of PNB Housing Finance declined to Rs 60,438 crore at the end of June of this year, from Rs 68,009 crore during the period of the previous year.

The business of the company, promoted by the state-owned Punjab National Bank (PNB), has been hit by the second wave of COVID.

“This quarter (June 2021) itself, we were able to reduce the pound by around Rs 800 crore in terms of business loans. And we would like to bring it down to less than Rs 10,000 crore (by March 2022)” . Hardayal Prasad, managing director and CEO of PNB Housing Finance, told PTI in an interview.

The company has reduced its portfolio by 25% since March 2020.

At some point, the company would like to make a decision on the size of business loans, Prasad said, adding that it was essential to have some financing from the builder.

“It (business book) was around Rs 11,800 crore (at the end of FY21). Now it’s around Rs 10,900-10,800 crore. So we’re definitely aiming to take it down below Rs 10,000 crore and in the future we will see what kind of wallet we would like to hold and what kind to let go, ”said Prasad.

He said the company took a massive initiative for its retail ledger and focused on granular ledger resulting in a higher proportion of loans under Rs 2million.

In January, the company rolled out a strategy to expand its retail portfolio.

“So we continue to monitor the deliverables that we have promised. And in that strategy, we made it very clear that we would go for a retail-oriented organization,” said Prasad.

According to PNB Housing Finance, retail will be its growth engine and it will take advantage of expertise in mass housing and the merchant category.

In the affordable housing segment, the lender will expand its “Unnati” portfolio, focusing on the average note size of Rs 15 lakh. It will also strengthen the distribution network with an increased presence in level II and III cities.

PNB Housing Finance saw a 5 percent of its net income to Rs 243 crore during the last quarter of June.

Noting that the company has done “a reasonably good job,” Prasad said net profit has jumped almost 90 percent sequentially.

“There’s a marginal drop if you look year over year (earnings). But you have to take into account that we actually have a wallet that’s running out, that’s a part. (book), and we will only reduce operations on the corporate side, which we have done significantly.

“So if you look at the profit, I think it’s reasonably good,” he added.

Almost 45 days of lockdown during the April to June period of this fiscal year due to the second wave of COVID and legal instructions have hampered the company’s operations as well as the recovery process, Prasad said. while adding that the efficiency of the collection has now improved.

In July, the efficiency of the collection went from 95% to almost 98%.

“During the quarter there were 45 days of lockdown so there was virtually no activity during that period. We plan to better manage them starting this month as we managed to withdraw some NPA. We withdrew about Rs 80 crore from NPA in July itself, ”Prasad said.

In addition, the company has launched the ‘IGNITE’ project which aims to increase efficiency by reducing costs.

“This project has completed its diagnostic study. To bring this project to fruition, we brought in a proven transformational leader. He is leading this IGNITE project, which will actually take care of almost everything.

“This is going to help us tremendously in the way we are going to do our business, because once we have a very, very good IT infrastructure and strong digital products, we can increase the numbers very quickly,” said Prasad.

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