PNB Housing Finance Ltd reports consolidated earnings for Q4, FY2020

The Board of Directors of PNB Housing Finance Limited today approved the Consolidated Audited Financial Results for the…

The Board of Directors of PNB Housing Finance Limited today approved the Consolidated Audited Financial Results for the quarter and financial year ended 31st March 2020. The financial numbers are based on IndAS.

Financial performance (Q4 FY19-20 vs Q4 FY18-19)

  • Net Interest Income at INR 488.1 crore vs INR 609.7 crore registering a decline of 19.9%.
  • Pre-provision Operating Profit decreased by 23.1% to INR 427.6 crore from INR 556.4 crore.
  • Profit after Tax degrew by 163.7% primarily on account of higher provisions including Covid-19 provision of INR 471 crore resulting in the loss of INR 242.1 crore from profit of INR 379.7 crore.
  • Adjusted for Covid-19 provision the PAT for Q4 FY19-20 would have been approx. INR 122 crore.
  • The Spread on loans for Q4 FY19-20 stood at 2.23% compared to 2.59% for Q4 FY18-19.
  • Net Interest Margin for Q4 FY19-20 stood at 2.61% compared to 3.18% for Q4 FY18-19.
  • Gross Margin, net of acquisition cost, for Q4 FY19-20 stood at 2.88% compared to 3.51% for Q4 FY18-19.

Financial performance (FY19-20 vs FY18-19)

  • Net Interest Income at INR 2,308.1 crore vs INR 2,063.5 crore registering a growth of 12%.
  • Pre-provision Operating Profit increased by 7% to INR 2,062.4 crore from INR 1,923.3 crore.
  • Profit after Tax decreased by 45.8% to INR 646.2 crore from INR 1,191.5 crore. Adjusted for Covid-19 provision the PAT for FY19-20 would have been approx. INR 1,010 crore.
  • The Spread on loans for FY19-20 stood at 2.46% compared to 2.35% for FY18-19. Excluding the assignment income and other Ind AS adjustment i.e. as per IGAAP the Spread on loans for 2019-20 is 2.11% compared to 1.98% for FY18-19.
  • Net Interest Margin for FY19-20 stood at 2.98% compared to 2.93% for FY18-19.
  • Gross Margin, net of acquisition cost, for FY19-20 stood at 3.21% compared to 3.34% for FY18-19.
  • The net worth as on 31st March 2020 stood at INR 7,998 crore.
  • The cumulative ECL provision as on 31st March 2020 is INR 1,766 crore resulting in the total provision to assets ratio at 2.61%. The total provision coverage ratio is at 95%.
  • Return on Asset is at 0.80% during FY19-20 as compared to 1.61% during FY18-19.
  • Gearing as on 31st March 2020 was 8.53x compared to 9.59x as on 31st March 2019.
  • Return on Equity of 8.12% for FY2019-20 vis a vis 17.44% for FY2018-19.

Business Operations

  • Disbursements stood at INR 18,626 crore during FY19-20 compared to INR 36,079 crore in FY18- 19. Retail disbursements degrew by 35% YoY to INR 17,111 crore during FY19-20. Corporate Finance disbursements degrew by 84% YoY to INR 1,515 crore during FY19-20.
  • Asset under Management (AUM) is at INR 83,346 crore as on 31st March 2020 moved from INR 84,722 crore as on 31st March 2019 registering a decline of 2% during the year with share of Retail Loans being 82% and Corporate loans being 18% of the AUM. During FY19-20, the Company sold corporate book loans worth INR 2,307 crore. The AUM reported is net of the Sell down portfolio. Loan Assets degrew by 9% YoY to INR 67,571 crore as on 31st March 2020 from INR 74,023 crore as on 31st March 2019.

Moratorium

  • On 27th March 2020, in order to mitigate the burden of debt servicing and provide relief to borrowers, Reserve Bank of India announced moratorium on loans for three months from March 2020 to May 2020 (Phase 1). This was further extended by another three months upto August 2020 (Phase 2).
  • Adopted Opt-in route for accepting customer requests
  • As on 5th June 2020, under phase 1, approx. 56% of Company’s AUM have opted for moratorium whereas under phase 2 approx. 31% of Company’s AUM opted for moratorium indicating a sharp drop in the customers requesting for moratorium.
  • Retail Loans under moratorium phase 1 account for 49% of the Retail AUM and 20% under moratorium phase 2

Borrowings

  • Total borrowings are at INR 68,216 crore as on 31st March 2020 from INR 72,362 crore as on 31st March 2019 registering a decline of 6% during the year.
  • The Deposit portfolio grew by 15% to INR 16,470 crore as on 31st March 2020 from INR 14,315 crore as on 31st March 2019 with expanding retail penetration.
  • Total assigned loans outstanding as on 31st March 2020 is at INR 15,775 crore.

Distribution and Service Network

  • As on 31st March 2020 the Company has 105 branches with presence in 64 unique cities and 23 Hubs. This includes 3 branches, which were made operational during the year including 1st ever deposit branch opened during the second quarter.
  • The Company also services the customers through 28 outreach locations.

Asset Quality

  • Gross Non-Performing Assets (NPA) at an AUM level is at 2.29% and 2.75% at Loan Assets as on 31st March 2020. Retail book GNPA stood at 1.25% and Corporate book GNPA stood at 8.18%.
  • Net NPA stood at 1.75% of the Loan Assets as on 31st March 2020 against 0.38% as on 31st March 2019.

Capital to Risk Asset Ratio (CRAR)

  • The Company’s CRAR based on IGAAP stood at 17.98% as on 31st March 2020, of which Tier I capital was 15.18% and Tier II capital was 2.80% compared to 13.98% with Tier I at 11.00% and Tier II at 2.98% as on 31st March 2019.
  • The risk-weighted assets as on 31st March 2020 stood at INR 49,143 crore.

Credit Rating

  • PNB Housing Finance Fixed Deposit programme has been rated “FAA+” by CRISIL. The Company’s Commercial Paper (CP) is rated at “A1(+)” by CARE & CRISIL and Non-Convertible Debenture (NCD) are rated at “AA+” by CARE and “AA” by India Ratings, CRISIL and ICRA. Further the bank loans long term rating is “AA+” by CARE and “AA” by CRISIL.
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