PNB Housing well capitalised to support loan growth in FY24: Girish Kousgi

Housing finance company (HFC) PNB Housing is planning to focus on reducing delinquencies in 2023-24. Its managing director & chief executive officer Girish Kousgi tells Nikesh Singh in a conversation in New Delhi that he sees a huge opportunity for the company in the prime housing segment in coming years. Edited excerpts:

PNB Housing recently raised Rs 2,494 crore from its rights issue. Will the company raise more capital?

After the recent raising of capital, the company is well capitalised to support its loan growth in 2023-24. There is no challenge of that aspect affecting our growth. The raised capital will be used for growth as the company sees a huge opportunity in the prime housing segment in years to come.

PNB Housing’s gross NPA (non-performing assets) stood at 3.83 per cent at the end of 2022-23. What is your GNPA and loan growth targets for this financial year?

We want to bring down delinquencies in 2023-24 to level with industry standards in the next four-six quarters. We expect disbursement and loan growth of around 22 per cent and 17 per cent, respectively, on the retail side this financial year. The retail loan book was muted in the first and second quarters. With growth returning in the last two quarters, it stood at 10 per cent year on year in 2022-23.

How do you see the company’s growth in the affordable housing sector in this financial year?

The HFC recently entered the affordable segment, and disbursed around Rs 137 crore till the end of Q4 of 2022-23. This year, the segment will contribute 10-11 per cent to the incremental business, with good growth opportunities. It will help us grow on the retail side; we are not looking at growing the corporate book.

The corporate side of the book shrank nearly halved in 2022-23. What is your take on that?

The company last year took a conscious call not to grow the corporate side of the book. This was done in view of the very high GNPA of around 8.35 per cent. The company was working aggressively on resolution and settlements to bring it down to a standard level. We will restart on that aspect by the end of 2023-24. The size of the corporate book is around Rs 3,800 crore at the end of last year. Today, we have only two NPA accounts on the corporate side, amounting to Rs 846 crore.

The National Housing Bank recently notified early warning signals (EWS) for HFCs to prevent accounts from turning NPA. How do you intend to implement that?

The EWS framework is a formal structure put in place by the regulator to track those defaults. The company will upgrade its technology to meet the same. The mechanisms are already in place for years. The company has a team for fraud detection and prevention, and a unit for risk containment before sanction of loans. The company also has a concept of pre-delinquency management to detect such defaults.