PNB Housing Finance looks to grow corporate loan book starting Q3

The New Delhi-based mortgage lender previously held a substantial corporate loan portfolio but reduced its exposure due to stress in the segment

After a three-year hiatus, PNB Housing Finance is looking to grow its corporate loan book from the current quarter (Q3) of FY25, Girish Kousgi, MD & CEO of the housing finance firm, told Business Standard. Having said that, the mortgage lender’s focus would continue to be the emerging and affordable housing segment.

 

The New Delhi-based mortgage lender previously had a substantial corporate loan portfolio, but due to stress in the segment, it reduced its exposure to corporate loans.

 

“We are starting with our corporate loan book this quarter. In the retail segment, we are expecting a growth of 17 per cent year-on-year (YoY) in FY25. In Q2FY25, the prime segment has grown by 23 per cent, the emerging segment has risen by 12 per cent and the affordable segment has surged by 68 per cent,” Kousgi said.

 

 

On the corporate side, the lender has a written-off pool of Rs 1,250 crore, with recovery assumed to be 67 per cent, worth nearly Rs 850 crore, which will be recovered in next three years, Kousgi said.

 

Meanwhile, the affordable segment of PNB Housing touched Rs 3,000 crore in Q2FY25, with the lender planning to reach Rs 5,000 crore by the end of FY25 and Rs 15,000 crore by FY27-end.

 

Additionally, the lender has indicated that it is looking to open 200 new branches in the next two years, taking the total branch count to over 500 by FY27-end.

 

Further, Kousgi said that demand in the affordable housing finance segment is likely to be upbeat during festive seasons, supported by interest subsidies given by the government.

 

The net interest margin (NIM) of the company also saw a marginal sequential rise in Q2FY25 to 3.68 per cent, aided by lower borrowing cost, lesser foreclosures and due to higher share in affordable and emerging markets.

 

The cost of borrowing was reported at 7.84 per cent in Q2FY25 as compared to 7.92 per cent in Q1FY25.