INSUBCONTINENT EXCLUSIVE:
Listed housing financecompanies (HFCs), as a group, posted a 3.7 per cent drop in second-quarter (Q2) profit year-on-year (YoY) to Rs
5,830 crore and 19 per cent sequentially on rise in interest expenses and uptick in provisions and write-offs.Operating income rose 13.7 per
cent YoY to Rs 54,086 crore in Q2 of 2022-23 (FY23)
Sequentially, income was up 62.3 per cent, from Rs 33,331 crore in the first quarter (Q1) of 2021-22 (FY22).
The uptick in operating income
reflects robustness in the home loan portfolio and hike in lending rates
Lenders have been able to pass on a part of the increase in policy rate, observed HFC executives.
The policy repo rate has gone up 190
basis points in the current financial year to date
Plus, there is expectation of another rate hike by the Reserve Bank of India in its December policy meeting.
Amongst large mortgage
Fin Homes grew 22.23 per cent YoY to Rs 28,482 crore at the end of September.
Rating agency ICRA, in a report, said HFCs reported on-book
portfolio growth of 11 per cent in FY22
The loan portfolio is expected to grow at 10-12 per cent in FY23.
While HFCs saw a tidy flow in income, they also had to shell out more to
raise funds amid tight liquidity conditions and increase in the cost of money
This was evident from a 21.8 per cent YoY increase in interest expenses to Rs 15,635 crore in Q2FY23 and sequentially to 10.3 per cent, from
Rs 12,832 crore in Q1FY23, according to Capitaline data.
With clenched regulatory norms and focus on enhancing credit profile, the
provisions and write-offs were up 86.5 per cent YoY to Rs 2,546 crore in Q2FY23
Sequentially, provisions and write-offs grew 161 per cent, from Rs 975 crore in Q1FY23.
ICRA, in its review of HFCs, said the asset quality
indicators are expected to witness some improvement
Also, steady growth in the industry portfolio and profitability, along with a healthy provision cover, will shield margins.
