LIC Housing net surges, weighs rate hike
LIC Housing Finance Ltd. has announced 60 per cent dividend for 2005-06, following a 192.03 per cent rise in net profit to Rs 41.38 crore for the fourth quarter ended March 2006 against Rs. 14.17 crore for the same period last year.
Total income for the reporting quarter rose to Rs. 354.40 crore from Rs. 275.91 crore in January-March 2005. Net profit for the full year rose 45. 12 per cent at Rs. 208.57 crore over Rs 143.72 crore for 2004-05, while total income rose to Rs. 1,268.83 crore from Rs 1,049.61 crore in the previous financial year.
On review of the home loan rates, S.K. Mitter, director, said lending rates may move up depending on market trends including costs of funds, liquidity. However, he did not elaborate on the extent of rise.
Since 90 per cent of its home loans are extended at floating rate, the company has been reviewing the rates every quarter. It had raised rates by 50 basis points across various slabs in April 2006 and next review is expected in the July-September 2006.
It would raise Rs. 5,500 crore in 2006-07 as against Rs. 4,200 crore from the market through term loans, bonds and public deposits. It may use LIC’s ntwork to garner deposits.
The loan sanctions grew by 13.87 per cent in 2005-06 to Rs 5,027.28 crore.
Its disbursements were up by 11 per cent to Rs 4,670.08 crore. The outstanding mortgage portfolio grew by 19.72 per cent to Rs 14,867.19 crore.
He further stated that the company would step up its project finance business in 2006-07 for which it has set a target to sanction Rs. 800 crore and disbursement of over Rs. 650 crore.
Last year, the housing company had scaled down its exposure to project finance and builders owing to concerns expressed by the Reserve Bank of India and, thereby, had strealimed the processes and improved monitoring of exposure. It has disbursed only Rs. 225 crore and sanctioned Rs. 119 crore to home projects.