National Housing Bank (NHB) has identified a technical partner for its mortgage guarantee foray and expects this four-way joint venture to take off by March next year.
“We are in the final lap. We are at the last stage of the deal”, Mr R.V. Verma, Chairman & Managing Director of NHB said here on Monday.
The technical partner would be a US-based mortgage insurance entity and would pick up 36 per cent stake in the proposed joint venture, Mr Verma said. He however declined to name the technical partner, stating that the concerned technical services agreement was yet to be inked.
The US based entity is expected to approach the Foreign Investment Promotion Board (FIPB) for foreign investment approval by December this year, he added.
Asian Development Bank (ADB) and International Finance Corporation (IFC) will each take a 13 per cent stake. NHB as the lead partner will hold 38 per cent stake in the proposed venture.
The initial paid-up capital of the venture will be Rs 120 crore. The proposed mortgage guarantee company would be a non-banking finance company (NBFC). Current regulations require mortgage guarantee companies to have a minimum paid up capital of Rs 100 crore.
A mortgage guarantee company provides credit guarantee to housing finance companies and banks on behalf of home loan borrowers. The guarantees are invoked in case of default by home loan borrowers.
NHB is also looking to set up a separate credit enhancement company. The housing finance regulator has formed separate working groups to look at credit enhancement and covered bonds
FLAT BOTTOMLINE:
NHB on Monday reported a net profit of Rs 279 crore for the year ended June 30,2011 marginally lower than the net profit of Rs 280 crore recorded in the previous financial year.
“Our net interest margins were under pressure during financial year 2010-11. We were focused on the volumes and not on the profits. Despite choppy and volatile market, we were to maintain bottomline performance. We expect to sustain this performance in the current year also”, he said
For the year ended June 30,2011, NHB made a total loan disbursement of Rs 12,035 crore, out of which rural housing had the share of 48 %, amounting to Rs 5,789 crore.