With its Loan disbursements up 21% in the September quarter from 17% growth in the June quarter, aided by expansion in distribution and improved sentiment in the economy, the developer loan portfolio, which makes up less than 3% of the loan book, declined over 4% in the September quarter because of a general slowdown in construction and caution is growing in this segment. The individual loan portfolio grew 18% compared with a year ago and that the management is expecting loan growth of 20% and margins at 2.35% at the end of this fiscal year. The housing financer's net interest margins, NIM, improved to 2.23% in the three months as its earnings were slightly better than expected in the September quarter helped by an improvement in its net interest margin (NIM) and higher disbursements. NIM improved to 2.23% in the three months ending 30 September from 2.19% in the June quarter as LIC Housing Finance recovered Rs.132cr from one developer account and reduced reliance on bank borrowing. The company is borrowing more through the non-convertible debentures route to reduce the cost of funds, said chief executive officer of LIC Housing Finance, Sunita Sharma, adding that gross non-performing assets (NPAs) improved to 0.63% of the loan book compared with 0.8% at the end of the June quarter, mainly aided by recovery in the developer account which led to an interest reversal. LIC Housing Finance is trying to build its risky LAP portfolio because of margin advantage of over 200 basis points. One basis point is one-hundredth of a percentage point. Overall, net profit increased 10% to Rs. 341cr after providing for deferred tax liability.
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