PNB Housing Finance’s Q2FY24 results

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PNB Housing Finance LimitedThe Board of Directors of PNB Housing Finance Limited today approved the Consolidated Unaudited Financial Results for the quarter ended 30th June 2023. The accounts have been subjected to a limited review by the Company’s Statutory Auditors in line with the regulatory guidelines. The financial numbers are based on IndAS

The Board of Directors of PNB Housing Finance Limited today approved the Consolidated Unaudited Financial Results for the quarter and half year ended 30th September 2023. The accounts have been subjected to a limited review by the Company’s Statutory Auditors in line with the regulatory guidelines. The financial numbers are based on IndAS

Key Highlights

  •  Gross NPA declined by 197 bps to 1.78% as of 30th Sept 2023 as compared to 3.76% as of 30th Jun 2023.
  •  Retail GNPA declined by 74 bps to 1.74% as of 30th Sept 2023 as compared to 2.49% as of 30th Jun 2023.
  •  Resolved and fully recovered a large Corporate NPA account reducing our Corporate GNPA to 2.86% from 24.99% as of 30 Jun 2023.
  •  Retail Loan Assets grew by 12% YoY to INR 58,471 Crore as of 30th Sept 2023, which is 96% of Loan assets.
  •  Total Loan Assets stood at INR 60,852 crore as on 30th Sept 2023 registering 5% growth YoY.
  •  The affordable segment contributed ~9% to the retail disbursement in Q2 FY23-24
  •  The Company’s CRAR stood at 30.38% as of 30th Sept 2023, of which Tier I capital is 28.50%
  •  ICRA & CRISIL have upgraded the outlook to ‘Positive’ from ‘Stable’ and reaffirmed the rating at “AA” in Q2 FY24.

Financial performance (Q2 FY23-24 vs Q2 FY22-23 and Q1 FY23-24)

  •  Net Interest Income improved by 2% YoY and 5% QoQ to INR 661 crore. During Q2 FY23, there was a one-off of INR 160 crore on assigned loans due to benchmark rate resets, excluding one-off net interest income grew by 35% YoY.
  •  Operating expenditure increased by 24% YoY and 12% QoQ to INR 168 crore.
  •  Pre-provision Operating Profit grew by 5% YoY and grew by 9% QoQ to INR 552 crore. Excluding one-off in Q2 FY 22-23 as mentioned above it grew by 30% YoY.
  •  Yield at 10.58% in Q2 FY24 as compared to 10.70% in Q2 FY23 and 10.59% in Q1 FY24.
  •  Spread on loans at 2.59% in Q2 FY24 as compared to 3.38% in Q2 FY23 and 2.62% in Q1 FY24.
  •  Net Interest Margin stood at 3.95% and Gross Margin, net of acquisition cost, stood at 4.18% in Q2 FY24.
  •  Credit Cost at 26 bps in Q2 FY24 as compared to 151bps in Q2 FY23 and 36bps in Q1 FY24.
  •  PBT improved by 49% YoY and 14% QoQ to INR 507 crore.
  •  PAT improved by 46% YoY and 10% QoQ to INR 383 crore.

Financial performance (H1 FY23-24 vs H1 FY22-23)

  •  Profit after Tax is at INR 730 crore vs INR 498 crore registering an increase of 47% YoY.
  •  Net Interest Income stood at INR 1,289 crore compared to INR 1,019 crore registering a growth of 27%.
  •  Operating Expenditure grew by 25% YoY to INR 317 crore.
  •  Pre-provision Operating Profit increased by 12% to INR 1,059 crore from INR 943 crore.
  •  ECL provision as of 30th Sept 2023 is INR 1,196 crore resulting in Stage 3 provision coverage ratio at 34% and total provision to assets at 1.97%.
  •  Spread on loans stood at 2.60% compared to 2.39% for H1 FY23.
  •  Net Interest Margin stood at 3.92% as compared to 3.25% in H1 FY23.
  •  Gross Margin, net of acquisition cost, is at 4.05% as compared to 3.74% in H1 FY23.
  •  Return on Assets (annualized) is at 2.14% as compared to 1.61% in FY23.
  •  Gearing, as of 30th Sept 2023, reduced to 3.77x compared to 4.87x as of 31st March 2023.
  •  Return on Equity (annualized) at 11.11% as compared to 9.98% for FY23.

Business Operations

  •  The total disbursements during H1 FY24 grew by 12% YoY to INR 7,866 crore. For Q2 FY24 stood at INR 4,180 crore registering an increase of 16% YoY and 13% QoQ.
  •  Retail disbursement grew by 13% YoY to INR 7,832 during H1 FY24. In Q2 FY23, retail disbursements grew by 18% YoY and 14% QoQ to INR 4,165 crore.
  •  Asset under Management (AUM) grew by 2% YoY to INR 67,415 crore as of 30th Sept 2023
  •  The Loan Asset grew by 5% YoY and 1% QoQ to INR 60,852 crore as on 30th Sept 2023
  •  Retail loans grew by 12% YoY and 3% QoQ to INR 58,471 crore as of 30th Sept 2023.
  •  Corporate loans are at INR 2,381 crore as of 30th Sept 2023, reduced by 58% as compared to 30th Sept 2022.

Distribution and Service Network

  •  The Company has 200 branches/outreach locations.
  •  Affordable business presence expanded to 89 branches/outreaches as of 30th Sept 2023

Asset Quality

  •  Gross Non-Performing Assets is at 1.78% as of 30th Sept 2023 as compared to 6.06% as of 30th Sept 2022 and 3.76% as of 30th June 2023.
  •  Retail GNPA is 1.74% as of 30th Sept 2023 as compared to 3.39% as of 30th Sept 2022 and 2.49% as of 30th June 2023.
  •  Corporate GNPA is 2.86% as of 30th Sept 2023 as compared to 30.37% as of 30th Sept 2022 and 24.99% as of 30th June 2023.
  •  Net NPA stood at 1.19% as of 30th Sept 2023. NNPA in the Retail segment is at 1.20% and in the Corporate segment at 0.95%.

Capital to Risk Asset Ratio (CRAR)

  •  The Company’s CRAR, based on IndAS, stood at 30.38% as of 30th Sept 2023, of which Tier I capital is 28.50% and Tier II is 1.88% as compared to 24.07% as of 30th Sept 2022, of which Tier I capital was 21.79% and Tier II was 2.28%

Commenting on the performance Mr. Girish Kousgi, Managing Director & CEO said:

“During the first half of the financial year, we have witnessed progress across key business parameters like Growth, Asset Quality, and Profitability. Our consistent efforts have enabled us to resolve and fully recover a large corporate account, which further aided in reducing our GNPA below 2% to 1.78% as of 30th Sept 2023. We have also made significant progress in our affordable housing portfolio over the last 3 quarters, and are on track to meet our commitments. Our ROA stood at 2.14% annualised for FY23-24.

As we look forward, we are confident of our ability to maintain this momentum and continue the growth trajectory in the fiscal year. We will continue to strive for excellence, leverage available market opportunities, and work towards achieving stronger performance.”