PNB Housing Finance, promoted by the Punjab National Bank, expects a loan disbursal worth around Rs. 13000 crores in this fiscal year due to the expected increase in demand in the months of October-November with the beginning of the festival season. Jay is here
PNB Housing Finance: Increase in Demand
As stated by Neeraj Vyas, MD and CEO, the demand for housing finance increased due to the relaxation in the lockdown guidelines by the government and movement in the economic sectors. The demand for mass housing has especially been growing.
The company expected a loan disbursal of Rs. 500 crores until September, but has already disbursed a loan amount of Rs. 694 crores in the first quarter of FY20. The amount disbursed in FY19 was Rs. 18626 crores, 48% lower than FY18.
The disbursal was lower in June due to low demand in the pandemic.
With the onset of the festival season in October, the company expects to disburse loan amounts of Rs. 1200 crores to Rs. 1500 crores per month, and for this amount to go all the way up to Rs. 2000 crores from January. Thus, the plan for the entire year includes a disbursal of Rs. 13000 crores.
PNB Housing Finance defines mass housing as a property that costs somewhere between Rs. 75 to 90 lakhs and requires a loan funding of 50 to 75 lakhs. This sector is increasing in the post-COVID era as people are demanding bigger accommodations for themselves, as well as demands by the NRIs returning to India.
The loan for mass housing has also been easier to avail of, especially for youngsters, as the interest rates for this loan sector have gone down, mostly due to the reduction in repo rate by the Central Bank. The bank expects high demand for this sector especially in the metro cities and other major cities.
PNB Housing Finance has also introduced a product called ‘Unnati’ for mass housing in a special attempt to increase its retail loan portfolio. It also plans to concentrate on lower risk-weighted retail assets.
In the first quarter, the Assets Under Management (AUM) stand at Rs. 83495 crores. This value is 5% lower than the AUM in the previous quarter, which was Rs. 88333 crores. Of this, the retail loan has an 82% share. The Capital Adequacy Ratio of the Company stands at 18.05%.