PNB Housing Finance eyes over 17% growth in FY25 loan book

Managing director Girish Kousgi told ET that the lender is aiming to grow its retail book by 17% in FY25, while the overall loan growth is likely to be more when it resumes corporate lending.

Its overall loan assets grew by 10% year-on-year to ₹65,358 crore at the end of FY24, while retail loans grew by 14%, the highest growth rate in the last five years. Its affordable housing loan book, which it started 15 months back, stood at ₹1,790 crore. PNB Housing Finances corporate loan book shrank 46% in FY24 to ₹2,052 crore as it was on a balance sheet cleansing exercise.

The lender has also started a new vertical called 'emerging market' from April this year to cater to the retail segment in smaller cities with average loan ticket size of around ₹25 lakh.

"We will have 50 branches in the emerging segment, which can give us a higher yield. So, our plan is to try and build the book from both affordable and emerging, which would contribute to about 40-42% of incremental business and the balance 58% would come from the prime segment," Kousgi told analysts in a post-earnings call.

"We are well capitalised and this will be good for the next two-and-a-half years, given our growth projections," he said.

The company raised ₹2,494 crore through rights issue in May last year, helping it to take its capital adequacy ratio to 29.3%.

The lender's net interest margin was lower at 3.65% in the fourth quarter to March 31, 2024 against 3.74% in the year-ago period, primarily due to shrinking of the corporate book. The lender is aiming to keep the NIM around 3.5% next year.

It has 300 branches, out of this 160 cater to the affordable home loan borrowers, 50 branches will be for the emerging segment and the balance 90 will cater to the prime segment.

"In order to bring undivided focus on the retail segment, we ensured that we set up different verticals," the MD said.

The prime segment typically offers housing loans and loans against property through 90 branches in metro and tier-1 cities, with an average ticket size of ₹35 lakh and 9-10% rate of interest. The emerging markets business is aimed at capturing the high yielding segments in tier-2 & 3 cities, with an average rate of interest of 10-11%. The affordable housing segment offers housing and non-housing loans to customers, with an average loan of ₹15 lakh at 11-14% rate of interest.