GIC Housing Finance's bad loans spike to 11.4% in Q1, solvency weakens

The deterioration in the asset quality would further impact GICHF's earnings profile, and consequently, its internal capital generation

A sharp rise in bad loans to 11.4 per cent in June 2021 from 7.4 per cent in March 2021 has weakened GIC Housing Finance’s (GIC HF’s) solvency and profitability.
 
With the second wave of Covid-19 coming in April 2021, the country again witnessed a series of lockdowns, which impacted the cash flows of borrowers.
 
Also, the company, which lends predominantly to the salaried class, was unable to collect from borrowers. This led to a sudden rise in slippages and weakening of solvency and profitability metrics.
 
Rating agency ICRA downgraded its rating for long-term bank lines and