Chennai: LIC Housing Finance Ltd, promoted by the Life Insurance Corporation of India, is targeting to reduce its borrowings from the banks and focus more loan against properties (LAP). The company said these would help it improve margin.
The country’s second largest housing company in the public sector has also set a 20 per cent growth target in loan advances as against 18 per cent in 2013-14. It had a loan portfolio of Rs 25,000 crore last year.
Speaking to reporters at the launch of its flagship property show, Ungal Illam, here today, Sunita Sharma, managing director and chief executive officer of LIC Housing, said since March the company had been focusing more on LAP, which in 2013-14 constituted less than three per cent.
During the current fiscal (year till today), the company increased it to four per cent and the target for 2014-15 was five per cent of the total portfolio, she said.
LAP would bring higher income, said Sharma, adding the company has also decided to bring down borrowings from the banks and would look at low-cost NCDs. In 2012-13, Bank borrowing constituted 29-30 per cent, which was brought down to 25 per cent, as at the end of March 31, 2014, and would be further reduced to 20-21 per cent this fiscal, she said. Net interest margin of the company stood at 2.25 per cent.
On the NPA’s, she said it was about 0.27 per cent. “We are probably in a controlled aggression and the sound credit appraisal mechanism helps us to keep the NPAs at a very low level,” she said.
Of it total asset book, the southern region accounted for 21 per cent. More than 90 builders are participating in the event, showcasing over 300 projects.