Despite a sharp drop in project loan disbursements, LIC Housing Finance (LICHF) reported a 21 per cent increase in net profit at Rs 256.50 crore in the April-June quarter, against Rs 212 crore in the corresponding year-ago period.
A 40 per cent rise in income from operations and a 36 per cent increase in other operating income (including from liquid schemes of mutual funds and interest on bank deposits) shored up the housing finance company's bottomline.
Project loan disbursements were down 79 per cent to Rs 77 crore (Rs 373 crore in April-June 2010).
However, individual loan disbursements were up 15 per cent to Rs 3,468 crore (Rs 3,018 crore).
“There has been some sluggishness in real estate transactions in certain parts of the country on account of customers going into a wait-and-watch mode,” said Mr V. K. Sharma, Director and Chief Executive, LICHF.
While there is good demand for self-occupied housing in Chennai and Tier-II and Tier-III cities, the demand in metros such as Mumbai is coming down due to high property prices.
Further, the Court directive on NOIDA land and the agitation in Telangana have created a difficult situation for lenders as well as prospective buyers and sellers of property, said Mr Sharma.
Project lending
On the slowdown in project lending, the LICHF chief explained that after December 2010, there was a lull in this segment as the company reviewed all sanctions and disbursements and put systems in place.
In December 2010, the housing finance company was rocked by a loan-for-cash scam.
In the project loan segment, LICHF is neither giving loans for purchase of land nor extending term loans. “We are giving loans only where projects are on. In July so far, we have sanctioned and disbursed project loans amounting to Rs 150 crore,” said Mr Sharma.
Shares of LICHF ended 2.81 per cent down at Rs 217.75 a share on the Bombay Stock Exchange against the previous close of Rs 224.05.