Indiabulls Housing Finance (IBHFL) reported a 40 per cent decline in standalone net profit at ₹579 crore in the first quarter ended June 30, 2019, against ₹968 crore in the year-ago period.

The company’s board of directors has declared an interim dividend of ₹8 per share of face value ₹2. A break-up of revenue from operations for the reporting quarter shows that interest income declined 19 per cent year-on-year (y-o-y) to ₹2,812 crore, fees and commission income was up 19 per cent y-o-y at ₹102 crore, and net gain on fair value changes jumped 92 per cent y-o-y to ₹338 crore.

On the expenses side, finance costs came down 4 per cent y-o-y to ₹2,118 crore, while impairment on financial instruments soared 130 per cent y-o-y to ₹122 crore.

The housing finance company had the benefit of ₹145 crore in the form of deferred tax credit, and this helped prop up the bottomline. In the year-ago period, it had to set aside ₹34 crore as deferred credit charge.

IBHFL’s loan assets declined 10 per cent y-o-y to ₹1,13,189 crore. The spreads came down to 3.14 per cent in the reporting quarter, from 3.23 per cent in the year-ago quarter. Gross non-performing assets increased to 1.47 per cent of gross advances in the reporting quarter, against 0.78 per cent in the year-ago quarter.

The housing finance company reported a 24 per cent y-o-y decline in consolidated net profit at ₹802 crore (₹1,055 crore). The consolidated net profit includes the results of entities such as Indiabulls Collections Agency, Ibulls Sales, Indiabulls Insurance Advisors, Indiabulls Capital Services and Indiabulls Advisory Services.

Merger

Regarding its proposed merger with Lakshmi Vilas Bank, IBHFL said since the announcement of merger in April 2019, in under three months, it has reduced its commercial real estate (CRE) exposure by ₹6,005 crore through refinance, and the micro, small and medium enterprise/loan against property book loan share is being increased. IBHFL has received approval from Competition Commission of India (CCI) in June 2019. In a presentation, the company said it has already made applications to the RBI, NSE and BSE for approval of the merger.

Meanwhile, IBHFL’s board of directors has authorised an issue of secured non-convertible debentures and unsecured, redeemable, non-convertible, subordinate debt in the nature of debentures (NCDs) of up to ₹25,000 crore and ₹1,000 crore, respectively, on private placement basis, in one or more tranches, from time to time.

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