PNB Housing Finance expects to disburse Rs 13,000 crore loan this fiscal: CEO Neeraj Vyas

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PNB Housing Finance hopes to disburse around Rs 13,000 crore loan in current fiscal, and expects demand to pick up around October-November with the onset of festive season, its MD and CEO Neeraj Vyas said. Demand from mass housing statement has started picking up post relaxations in coronavirus-induced lockdowns and gradual reopening of economy, he said.

"Demand in a particular segment (mass housing) is picking up, which generally in the market is called green shoots (of revival). We were expecting that we would be touching sometime in September disbursements of Rs 500 crore, but we have already crossed that mark," Vyas told PTI in an interview.

PNB Housing Finance, promoted by Punjab National Bank, disbursed loans of about Rs 694 crore (Rs 674 crore retail loan and Rs 20 crore corporate loan) in the first quarter ended June of 2020-21 as against Rs 7,634 crore in the year-ago quarter. Disbursement was lower in June quarter this year because of disruption cause by the coronavirus pandemic.

Vyas said the company hopes to disburse about Rs 1,200-1,500 crore per month October onwards, and further increase it to about Rs 2,000 crore per month by January.

"I expect that by October-November, when festival demand picks-up, we will be able to disburse this (much)...October onwards we would be disbursing roughly around Rs 1,200-1,500 crore loan per month. And finally we have planned that by January we will be disbursing Rs 2,000 crore loan (per month). So we have planned that for the entire year we would be doing Rs 13,000 crore disbursements," Vyas said.

In 2019-20, PNB Housing Finance had disbursed loans of Rs 18,626 crore, 48 per cent lower than in preceding fiscal year (2018-19).

Going ahead, Vyas expects higher demand from mass housing segment.

"Mass housing is defined where property price is somewhere Rs 75-90 lakh and the loan requirement is from Rs 50-75 lakh. This is the sector which is looking good because after COVID-19, people are realising that they need a bigger accommodation for themselves, and also many NRIs are returning to India. We are getting lot many enquiries from NRIs.

"And also some of the youngsters who earlier thought that they do not need house and were staying in rental house, probably they also are going for the housing loan. So that is giving hopes to us that at least this mass housing segment will pick up much before," Vyas said.
On interest rates, he said the rates have bottomed out.

"In my opinion, the interest rates have bottomed out. There is no scope further for this to go down, these are the best rates available for housing sector. Most of the interest rates from banks are available at external benchmark (linked rate).
"So it is kind of floating rate of interest where it depends on policy rates, when it (repo) goes up rates go up, when it goes down the rates (housing) come down," he added.

Vyas said demand for housings loan will be mostly concentrated in top 9-10 cities, including metros and the likes of Ahmedabad, Nagpur and Bengaluru, among others.

"In my opinion the demand will come from the top 9-10 cities, the five metros and cities like Ahmedabad, Nagpur, Bangalore...these 9-10 cities will remain as focus. Demand will come from these places because the density of population is more and there is shortage of housing," he added.

For affordable housing segment, Vyas said PNB Housing Finance has a product called 'Unnati' which will remain key focus for these geographies.

Like the previous fiscal, the company is making efforts in ongoing fiscal also to sell its corporate loan book and increase retail portfolio (housing and non-housing loan).

The company's asset under management (AUM) stood at Rs 83,495 crore at the end of June quarter, 5 per cent lower than Rs 88,333 crore a year ago.

The share of retail loan stood at 82 per cent, while that of corporate loan was down to 18 per cent from 20 per cent in June 2019.

As per its business plan for this fiscal, PNB Housing Finance will continue to focus on lower risk weighted retail assets, resulting in higher percentage of retail book in the total AUM, Vyas said.

The company's capital adequacy ratio had fallen to 13.98 per cent in March 2019, which had prompted the decision to reduce corporate finance book, he said.

"We were very close to breaching the regulatory capital requirement at that point of time (March 2019). So from that time, we have taken a call that till we will raise our capital adequacy and until we are not comfortable in our corporate finance business, we will not do corporate finance," Vyas further said.

As on June 30, 2020, the company's capital adequacy ratio (CAR), also known as capital to risk weighted assets ratio (CRAR), stood at 18.05 per cent.