LIC Housing Q1 net slumps 25%

LIC Housing Finance, a subsidiary of Life Insurance Corporation of India (LIC), today reported a y-o-y 25 per cent fall in net profit for the June quarter, as its interest expenditure increased by 33 per cent and other expenses by 40 per cent.

The mortgage lender's net profit in the first quarter of 2006-07 was Rs 37.46 crore, down from rs 50.17 crore a year earlier.

LIC Housing director and chief executive, S K Mitter, said, "Though interest income grew in line with the asset growth, there was some margin pressure on account of higher borrowing costs. With the hike in lending rates, margins are now likely to improve substantially."

Its interest income for the quarter ended June 2006 was Rs 322 crore as against Rs 271 crore a year earlier, down 19 per cent. The interest expenses for the first quarter were Rs.257 crore, down from Rs 193 crore a year earlier.

The company recorded a 13 per cent growth in individual loans disbursements in the first quarter of 2006-07. During the quarter, the company disbursed Rs 1,063 crore to individuals, as against Rs 938 crore a year earlier.

Individual Loan sanctions grew from Rs 999 cr to Rs 1,062 crore.

Its outstanding mortgage portfolio as on June 30, 2006 was Rs 15,393 crore, up 19 per cent from Rs 12,889 crore a year earlier.

The company is in the process of revamping its distribution channels by appointing professional agents to target the high-end market segment in cities like Mumbai and Chennai.