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PNB Housing Finance could re-enter the high-yield business loan segment when the time is right

According to a senior company official, PNB Housing Finance could have the option of returning to the high-yield corporate lending it stopped two years ago if it issues a Rs 2,500 crore rights issue and maintains a solid CRAR.

According to Hardayal Prasad, Managing Director and Chief Executive Officer of PNB Housing Finance, the size of the corporate loan portfolio for HFC, which is being pushed by the bank, is currently at Rs 6,006 crore and could decrease by Rs 1,000 crore. more by December. .

Due to liquidations and accelerated prepayments, the loan portfolio fell by 45% in the first quarter of 2022-2023 compared to the same period of the previous year.

As of June 30, 2022, the company posted a comfortable CRAR (capital to risk-weighted assets ratio) of 23.9%, compared to 21.4% in the same period a year earlier (June 2021) and 23.4% in the previous quarter, which ended in March 2022. In order to ascertain an entity’s ability to absorb losses, the CRAR, an assessment of a company’s available capital, is essential.

The bank has consistently increased its CRAR by 18% at the end of March 2020 and by 18.7% at the end of March 2021.

By December this year, PNB is expected to contribute Rs 500 crore to the rights issue, with other shareholders contributing the remaining funds.

In the first quarter of FY23, he closed a corporate account worth Rs 353 crore, sold an account to an asset reconstruction firm for Rs 187 crore and delisted two corporate accounts worth Rs 425 crore.

The company is focused on accelerating retail loan growth, with assets under management (AUM) expected to reach 91% by the end of the quarter ended June 2022, from 85% a year ago. It was up 89% from the March 2022 quarter.

The April to June quarter of 2022-23 saw a slight decline in net profit after tax for PNB Housing from Rs 243 crore to Rs 235 crore, mainly due to a weaker than average quarter.

Prasad claimed that the organization is entirely focused on the retail sector. From Rs 1,652 crore in the first quarter of FY22 to Rs 3,395 crore in the June quarter, retail payouts more than doubled.

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