LIC Housing Finance aims for 13% growth in loan book for FY25: MD & CEO | Finance News

LIC Housing Finance, the largest housing finance company, is aiming for 13 per cent growth in loan book in financial year 2024-25, said Tribhuwan Adhikari, Managing Director and Chief Executive Officer of the company.

“The loan book growth should be in lower double digits. If you bifurcate among the Individual Home Loan (IHL) and the project loan, I would expect about 5-7 per cent growth in the project loan book and the rest of it coming from the IHL or the retail book,” Adhikari said.

In FY24, the Individual Home Loan portfolio increased by 7 per cent year-on-year to Rs 2.44 trillion as on 31 March 2024, whereas, the Project loan portfolio rose by 4 per cent year-on-year to Rs 8,036 crore as on 31 March 2024.

The total outstanding portfolio of the company grew 4 per cent year-on-year to Rs 2.87 trillion from Rs 2.75 trillion in the earlier year.

The growth in loan book is expected to be supported with increased focus on the affordable housing finance segment. Currently, the segment accounts for nearly 10-12 per cent of the total loan portfolio which is targeted to reach 20-25 per cent in the next three to four years, and the company has started to work on it.

“We are in the process of moving towards affordable finance as we feel that it has a lot of opportunities. We will definitely go into tier-3 cities and we have made some structural changes in the organisation. We wanted to open 50 area offices in these towns. So out of 50 offices planned, we have opened 46 new offices in these tier-3 towns,” said Adhikari.

Furthermore, the company plans to hire nearly 250 to 300 people in the administrative and marketing sectors in FY25. The hiring in the marketing segment will give a further boost to the affordable housing segment. The company currently has approximately 2,500 people with additional hiring taking the total to around 2,800 to 2,900 in FY25.

In the fourth quarter of FY24, LIC Housing Finance posted a 7.5 per cent drop in net profit to Rs 1,091 crore in Q4 FY24 from Rs 1,180 crore in Q4 FY23. The Net Interest Income (NII) of the company increased by 12 per cent year-on-year to Rs 2,237.60 crore from Q4 FY23. The decline in net profit was due to an increase in expenses. The company faced an additional tax expense of Rs 127 crore related to deferred tax liabilities from previous years. The company also set aside Rs 100 crore for expected credit losses to meet board guidelines.

First Published: May 16 2024 | 9:08 PM IST