LIC Housing Finance reported a sharp decline of 58% in its net profit at Rs 98 crore for the second quarter ended September 30, 2011.
The company had posted a net profit of Rs 234 crore in the corresponding period last year.
However, the company's total income grew 37% to Rs 1,515 crore for the quarter under review from Rs 1,107 crore.
The fall in the net profit is, however, notional as the company had to make a provision of Rs 205 crore during the quarter, pursuant to the National Housing Bank's recent directive related to provisions on standard assets. This is in addition to the regular provision of Rs 519 crore for non-performing assets.
LIC Housing Finance disbursed loans of Rs 4,736 crore in the individual loans segment during this period, registering a growth of over 24%.
On the other hand, loan disbursements to developers fell by 65% during the quarter, standing at Rs 412 crore as against Rs 1,283 crore in the same period previous year.
Commenting on the second quarter results, LIC Housing Finance Director and Chief Executive VK Sharma, said: "The quarter has been a challenging one in terms of overall business environment, especially in view of successive rate hikes in the system. However, despite the adversities, the company has been able to post healthy growth and also has been successful in delivering an improvement in asset quality."