Mumbai, Jan 19 (PTI) Controversy-mired LIC HousingFinance today posted an impressive 39 per cent jump in its netprofit at Rs 213.49-crore for the third quarter of FY 11,which saw its CEO getting caught in the bribes-for-loan scam.
The company''s net profit in the correspondingOctober-December period in 2009 was Rs 153.57-crore and itsnewly-appointed Chief Executive V K Sharma said the numberswould have been much better had it not been for thecontroversy.
"It would have been much, much better if not for theincident (bribes for loan scam)," Sharma told PTI.
The housing finance subsidiary of life insurance giantLIC did not disburse to project proposals from corporatesthrough December in the aftermath of the scandal unearthed bythe CBI in late November, Sharma said, adding disbursements toprojects will start tomorrow.
Ramachandran Nair, the then CEO of the company, wasarrested along with seven others for allegedly giving loansagainst bribes in November. Sharma had to be hastily put incharge of operations as a fall-out.
Sharma said all the loan accounts of nine corporatestotalling Rs 389-crore which are under scrutiny are performingwell and in fact, two of the corporates having an outstandingof around Rs 120-crore have also expressed a desire to prepay.
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As of December 31, total outstanding from builders stood at Rs 4,586-crore with the gross non-performing assetsat 0.08 per cent.
As a fall-out, LICHF has revised its systems andprocesses while lending, Sharma said, adding it will not belending afresh to the nine corporates under the scanner.
The jump in net profits was helped by a 55 per centrise in net interest income to Rs 352-crore while Sharma saidthe retail lending business, which constitutes nearly 90 percent of the total pie, grew in a very healthy way.
In times of liquidity crunch and rate hikes, thecompany was able to widen its net interest margins (NIM) toabove-the-expectation 3.14 per cent as against 2.93 per centin the year-ago period.
The lender''s net NPA for the reporting quarter camedown to 0.18 per cent as against 0.77 per cent year-ago.
Sharma said a circular from sector regulator NationalHousing Bank (NHB) to increase provisions on teaser loansprompted the bank to make a higher provision at Rs 234.92-crore which ate into operating profits.
Sharma said the company stands well capitalised as ofnow but also hinted at a fresh round of capital raising in thenext fiscal, without divulging the route it planned to takefor the same.