PNB Housing Finance Q1 profit drops 10% to Rs 257.2 crore on lower disbursements

PNB Housing Finance (PNBHFL), promoted by state-owned Punjab National Bank, on Thursday reported a consolidated net profit of Rs 257.2 crore for the first quarter ended June 30, 2020, compared to Rs 284.5 crore in the same period last year. The company registered a year-on-year (YoY) decline of 10 per cent.

The housing finance company's net interest income (NII), the difference between interest earned and interest expended, fell 22 per cent YoY to Rs 487.8 crore during Q1FY21 from Rs 625.5 crore in Q1FY20.

Net interest margin during the quarter under review stood at 2.66 per cent compared to 3.14 per cent for Q1FY19, due to nil securitisation during Q1FY21 compared to Rs 2,318 crore in the year ago period.

The operating profit for the April-June quarter was Rs 404.6 crore, down 30 per cent from Rs 578.2 crore in Q1FY20.

During the quarter under review, the disbursements stood at Rs 694 crore compared to Rs 7,634 crore during Q1FY20, due to the impact of lockdown and economic slowdown.

Asset under Management (AUM) stood at Rs 83,495 crore in Q1FY21 compared to Rs 88,333 crore in the year-ago period, registering a decline of 5 per cent. The share of retail loans constitute 82 per cent of the AUM and corporate loans share stood at 18 per cent.

The company said that nearly 39 per cent of its AUM has opted for moratorium in line with the Reserve Bank of India guidelines.

Total borrowings fell by 7 per cent YoY to Rs 67,283 crore, while the Deposit portfolio grew by 5 per cent to Rs 16,203 crore. Total assigned loans outstanding was at Rs 15,486 crore as on June 30, 2020.

Commenting on the performance Neeraj Vyas, Managing Director and CEO said: "During the quarter, the COVID-19 pandemic had a significant impact on the disbursements resulting in the lowest quarterly disbursements in more than 24 quarters. However, with all our branches now operational we are witnessing an increasing trend in disbursement on a month on month basis."

"The company has rolled out its business plan for FY21 and will continue to focus on the lower risk weighted retail assets, resulting in a higher percentage of retail book in the total AUM. As a part of cost rationalisation, the company has merged two branches during the quarter and will merge a few more over next few months. During the year, the company will continue its focus on recovery, liquidity, sell down of the corporate book, cost rationalisation and strengthen its balance sheet by further reduction in gearing."

As a part of cost rationalisation, the company has merged two branches with other branches. As a result, the company has 103 branches with presence in 64 unique cities and 23 Hubs at the end of June quarter.

On the asset front, gross non-performing assets (NPA) at an AUM level stood at 2.32 per cent and 2.76 per cent at loan assets as on June 30, 2020. Net NPA stood at 1.67 per cent of the loan assets against 0.67 per cent as on June 30, 2019.

Meanwhile, shares of PNB Housing Finance ended at Rs 210.25 apiece on BSE on Thursday, up 4.99 per cent from previous close.

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