PNB Housing Finance looks to raise Rs 2,000 crore

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PNB Housing Finance is looking to raise tier 1 capital up to Rs 2,000 crore to grow business and keep a healthy capital adequacy ratio, amid a challenging business environment with several non-bank lenders facing a credit crisis.
The board of the company, which is 33 per cent owned by Punjab National Bank, has approved the plan to raise equity capital via preferential issue of shares or qualified institutions placement or rights issue, the company announced on Tuesday.
"The objective of raising capital is to support business growth, maintain a comfortable capital adequacy ratio and have a lower gearing," the company said in regulatory filing to stock exchanges.
“Amidst the macro economic challenges, the company continue to register growth across business and financial vectors. In the current environment, we are cautious on lending to corporate houses and focusing more on retail business, cost efficiencies, maintaining adequate liquidity, diversified borrowing and healthy asset quality across segments," Managing Director Sanjaya Gupta said.
Its net profit grew 11 per cent at Rs 285 crore in the June quarter against Rs 256 crore in the year ago period, with net interest income rising 45 per cent at Rs 626 crore from Rs 433 crore. The spread on loans stood at 2.53 per cent compared to 2.11 per cent a year back.
Net interest margin for June quarter has improved to 3.14 per cent compared with 2.74 per cent in the year ago period on loan assets of Rs 75,933 crore, which grew 19 per cent year-on-year from Rs 63,906 crore.
The company's loan disbursements has however shrunk 22 per cent year-on-year to Rs 7,634 crore during the first quarter, reflecting the strained business environment. This is because of 81 per cent de-growth in corporate loan disbursement to Rs 605 crore.
Housing loans accounted for 72 per cent of its portfolio, the company said.

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