Rights release of ₹2,500 crore by PNB Housing to be finalized by December

“RBI has given approval for infusion 500 crore in PNB Housing Finance. After the rights issue, the bank’s stake will come down from 30 per cent but above 26 per cent, so that the bank retains the promoter status,” PNB Managing Director AK Goel said.

PNB Housing Finance said in a statement that “PNB has agreed to participate in the rights issue of up to Rs 500 crore to maintain the banks’ stake at 30% or less but above 26% and to maintain the status as promoter.” Obtained RBI approval for the same.The Company has received a Final Settlement Order on 19th July 2022 under which the issues raised vide SEBI letter dated 25th June 2021 shall be treated as Preferential Issues in terms of SEBI (Settlement Proceedings) Regulations, 2018. has been dealt with.”

Goyal said the rights issue process is expected to end in December or the latest March quarter, according to PTI.

As on June 30, 2022, the bank’s net NPAs stood at 4.26 per cent of all advances, while its gross NPAs reached 11.2 per cent. Regarding PNB’s financial performance, Goyal said that by the end of March 2023, the bank aims to reduce its gross non-performing assets (NPAs) in single digits and its net NPAs by 3.5%. According to him, the bank aims to increase the credit growth to 11-12% in this financial year.

“The retail, agriculture and MSME percentage in the total loan book will increase to 54 per cent from the current 52.6 per cent by the end of FY23. As far as the capital adequacy ratio is concerned, the bank is comfortable with 12 per cent credit growth.

Nevertheless, the bank proposes to increase 12,000 crore from Tier I and Tier II bonds, he said.

“Operating profit is expected to grow by 10-15 per cent during the current fiscal, with focus on recovery, reduction in fresh slippages and improvement in net interest income,” Goyal told PTI.

PNB Housing Finance’s net interest income for the first quarter of FY 2022-23, which ended June 30, 2022, declined by 33 per cent year-on-year and 2 per cent quarter-on-quarter due to decline in corporate earnings. Bookkeeping and operating expenses grew 5 per cent year-on-year and declined 3 per cent quarter-on-quarter to Rs 121 crore. Net interest margin was 2.4 per cent in Q1 FY23, as compared to 3.2 per cent in Q1 FY22 and 2.3 per cent in Q4 FY22. Profit after tax (PAT) declined by 3 per cent on a year-on-year basis and increased by 39 per cent quarter-on-quarter to Rs 235 crore. As per the retail segment, the housing finance company’s disbursements grew 96% YoY to Rs 3,451 crore, while its retail loan assets grew 1.7% YoY and 1.1% QoQ to Rs 50,295 crore.

Feather 3,639 crore, gross NPAs 7.4% YoY and 22.7% QoQ and in Q1 FY23, net interest margin was 2.4 per cent, down from 3.2 per cent in Q1 FY22. Gross margin, net of acquisition costs, stood at 3.0 per cent in Q1 FY23, compared to 3.3 per cent in Q1 FY22 and 3.01 per cent in Q4 FY22. The return on assets (annualized) for the housing finance firm is 1.47 per cent, up from 1.24 per cent in FY22, and the return on equity (annualized) is 9.3 per cent, up from 8.9 per cent for FY22.

Commenting on the performance, Mr. Hardayal Prasad, Managing Director & CEO, said: “Demand for the real estate sector remains strong with 9-11% growth expected by ICRA in FY23. To take advantage of this opportunity, We continue to focus on retail to accelerate growth.Our retail disbursements grew 106% y-o-y during the quarter. To expand our footprints in the affordable segment during the quarter, we Opened 10 new growth locations. We have been persistent in improving its asset quality, which has led to a reduction in Gross NPAs by 23% QoQ to INR 3,639 Crores in Q1FY23.”

Shares of PNB Housing Finance Ltd closed today 349.95 each, down 0.65% from its previous close. On a YTD basis, the stock has fallen 28.68% so far in 2022.

(with inputs from PTI)

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