MUMBAI: LIC Housing Finance reported 1.6% drop in net profit for the third quarter compared to the same period a year ago due to lower project loans and deterioration in asset quality.
LIC Housing's net profit was at Rs 491 crore in the third quarter ended December 31, 2018 against Rs 499 crore in the year ago quarter.
Loan book grew 26.94% to Rs 1.56 lakh crore paced by loans to home buyers in Bangalore, Hyderabad, Mumbai, Chennai and Delhi. Retail loans grew by 37% whereas project loan fell by 14%.
"The focus of buyers have moved towards completed projects and we see end users buying property and not for investment purposes in all markets," said Vinay Sah MD and CEO LIC Housing Finance.
Under pradhan mantra was yojana, the company has disbursed Rs 1,285 crore.
"Lower disbursement in project finance dragged down the profits while we grew our retail book which is core to housing finance," said Sah. "This is one of the best quarters as far as retail disbursements are concerned. The share of project finance is maintained at around 4% of the book, which is the lowest amongst housing finance companies."
Net interest margin was 2.33% compared to 2.75%.
Asset quality deteriorated during the quarter to 0.87% compared to 0.56% because of one project loan slipping, taking project finance NPA to 10.3% from 9.7%.
Non-core loans which includes LAP grew by 13%.
Shares of the company closed 2.19% lower to Rs. 557.25, from its previous close on the Bombay Stock Exchange.
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