LIC Housing Finance Q1 net grows 71% on higher disbursements

LIC Housing Finance Q1 net grows 71% on higher disbursements

Mumbai: Mortgage lender LIC Housing Finance on Thursday reported a 71% rise in April-June net profit, beating analysts’ expectations as loan disbursements rose in a seasonally weak quarter.

The firm, part of the country’s largest insurer, Life Insurance Corp of India, reported a net profit of Rs2.12 billion compared with Rs1.24 billion in the same period last year.

Its quarterly net interest income rose to Rs2.94 billion versus Rs1.74 billion.

A Reuters poll of brokerages was expecting LIC Housing Finance to report a net profit of Rs1.81 billion on net interest income of Rs2.82 billion for the period.

“This is probably seasonally the weakest quarter for the company, still the disbursement and the sanction growth remains pretty high," said Santanu Chakrabarti, analyst at India Infoline.

Loan disbursements in the quarter rose 40% to Rs33.9 billion from Rs24.3 billion, while loan sanctions rose 51% to Rs53.48 billion.

The firm has stated it plans to borrow Rs200 billion to meet its disbursement target of 40% in 2010-11.

Its net interest margins (NIM) in the quarter stood at 3.01% against 2.45% a year ago.

“We think 2.9 to 3% NIMs looks quite likely for the whole year," IIFL’s Chakrabarty said.

Its asset quality also improved as gross non performing assets as of 30 June fell to 0.92% from 1.51% a year ago, the firm said in a statement.

At 3:13 p.m., LIC Housing shares were up 7.12% at Rs1,072.65 in a choppy Mumbai market.