PNB Housing Finance Ltd announces Q1FY21 results

Consolidated Unaudited Financial Results for Q1 FY 2020-21 Ended 30th June 2020

The Board of Directors of PNB Housing Finance Limited today approved the Consolidated Unaudited Financial Results for the quarter ended 30th June 2020. The accounts have been subjected to a limited review by the Company's Statutory Auditors in line with the regulatory guidelines. The financial numbers are based on IndAS.

Financial performance (Q1 FY20-21 vs Q1 FY19-20)

- Net Interest Income at INR 487.8 crore vs INR 625.5 crore registering a decline of 22%.
- Pre provision Operating Profit decreased by 30% to INR 404.6 crore from INR 578.2 crore.
- Profit after Tax at INR 257.2 crore vs INR 284.5 crore registering a decline of 10% YoY.
- The Spread on loans for Q1 FY20-21 stood at 2.19% compared to 2.53% for Q1 FY19-20. The Company has not done any securitization during the quarter. Excluding the assignment income generated in Q1 FY2019-20, i.e. on the IGAAP basis, the Spread for Q1 FY20-21 is 2.28% compared to 1.98% in Q1 FY2019-20, an increase of 30 basis points.

- Net Interest Margin for Q1 FY20-21 stood at 2.66% compared to 3.14% for Q1 FY19-20 declined owing to nil securitization during Q1FY20-21 compared to INR 2,318 crore during Q1 FY19-20.

- Gross Margin, net of acquisition cost, for Q1 FY20-21 stood at 2.61% compared to 3.44% for Q1 FY19-20 due to lower fee and other operating income and nil securitization during Q1 FY20-21.

- The cumulative ECL provision as on 30th June 2020 is INR 1,837.1 crore resulting in the total provision to assets ratio at 2.7%. The total provision coverage ratio is at 98%.

- Return on Asset is at 1.33% during Q1 FY20-21 as compared to 1.37% during Q1 FY19-20

- Gearing as on 30th June 2020 was 8.24x compared to 9.19x as on 30th June 2019.

- Return on Equity of 12.6% for Q1 FY20-21 vis a vis 14.8% for Q1 FY19-20.

Business Operations

- The disbursements stood at INR 694 crore during Q1 FY20-21 compared to INR 7,634 crore during Q1 FY19-20. The lower disbursements were due to the impact of lockdown and economic slowdown. The disbursements, however, registered an increase on a month on month basis. Retail disbursements were at INR 674 crore and Corporate disbursements at INR 20 crore during Q1 FY20-21.

- Asset under Management (AUM) is at INR 83,495 crore as on 30th June 2020 as compared to INR 88,333 crore as on 30th June 2019 registering a decline of 5% YoY with share of Retail Loans being 82% and Corporate loans being 18% of the AUM down from 20% as on 30th June 2019.

- Loan Assets degrew by 10% YoY to INR 68,009 crore as on 30th June 2020 from INR 75,933 crore as on 30th June 2019.

Moratorium

- On 27th March 2020, in order to mitigate the burden of debt servicing and provide relief to borrowers, Reserve Bank of India announced moratorium on loans for three months from March 2020 to May 2020 (Phase 1). This was further extended by another three months upto August 2020 (Phase 2).

- Company adopted Opt-in route for accepting customer requests for moratorium.

- As on 30th June 2020, approx. 39% of Company's AUM have opted for moratorium which has reduced substantially from 56% in Phase 1.
* Retail Loans under moratorium account for 29% of the Retail AUM which has also reduced from 49% in Phase 1.

Borrowings

- Total borrowings are at INR 67,283 crore as on 30th June 2020 from INR 72,261 crore as on 30th June 2019 registering a decline of 7% during the period.

- The Deposit portfolio grew by 5% to INR 16,203 crore as on 30th June 2020 from INR 15,446 crore as on 30th June 2019 with expanding retail penetration.

- Total assigned loans outstanding as on 30 th June 2020 is at INR 15,486 crore.

Distribution and Service Network

- As a part of cost rationalization, the Company has merged two branches with other branches. As a result, as on 30th June 2020 the Company has 103 branches with presence in 64 unique cities and 23 Hubs.

- The Company also services the customers through 27 outreach locations.

Asset Quality

- Gross Non-Performing Assets (NPA) at an AUM level is at 2.32% and 2.76% at Loan Assets as on 30th June 2020. Retail book GNPA stood at 1.29% and Corporate book GNPA stood at 8.05% as on 30th June 2020.

- Net NPA stood at 1.67% of the Loan Assets as on 30th June 2020 against 0.67% as on 30th June 2019.

Capital to Risk Asset Ratio (CRAR)

- The Company's CRAR based on IGAAP stood at 18.05% as on 30th June 2020, of which Tier I capital was 15.33% and Tier II capital was 2.72% compared to 15.13% with Tier I at 12.04% and Tier II at 3.09% as on 30th June 2019.

- The risk-weighted assets as on 30th June 2020 stood at INR 50,661.22 crore.

Credit Rating

- As on 23rd July 2020, PNB Housing Finance Fixed Deposit programme has been rated "FAA+" by CRISIL and "AA" by CARE. The Company's Commercial Paper (CP) is rated at "A1(+)" by CARE & CRISIL and Non-Convertible Debenture (NCD) are rated at "AA" by CARE, India Ratings, CRISIL and ICRA. Further the bank loans long term rating is "AA" by CARE and CRISIL.

Commenting on the performance Mr. Neeraj Vyas, Managing Director & CEO said: "During the quarter, the Covid-19 pandemic had a significant impact on the disbursements resulting in the lowest quarterly disbursements in more than 24 quarters. However, with all our branches now operational we are witnessing an increasing trend in disbursement on a month on month basis.

The Company has rolled out its business plan for the FY 20-21 and will continue to focus on the lower risk weighted retail assets, resulting in higher percentage of retail book in the total AUM. As a part of cost rationalisation, the Company has merged two branches during the quarter and will merge few more over next few months.

During the year, the Company will continue its focus on recovery, liquidity, sell down of the corporate book, cost rationalisation and strengthen its balance sheet by further reduction in gearing."

Shares of PNB Housing Finance Ltd was last trading in BSE at Rs.210.25 as compared to the previous close of Rs. 200.25. The total number of shares traded during the day was 82509 in over 2010 trades.

The stock hit an intraday high of Rs. 210.25 and intraday low of 200.5. The net turnover during the day was Rs. 17091066.

Source : Equity Bulls

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