PNB Housing Finance Q2 Results: Net Profit Up 46% On Improved Asset Quality

PNB Housing Finance Ltd.'s profit rose in the second quarter of fiscal 2024, on account of rise in interest income and significant improvement in asset quality.

Standalone net profit increased 46% year-on-year in the quarter ended September 2023 to Rs 384.40 crore, as compared with Rs 263 crore in the same quarter last year, according to a regulatory filing issued on Monday.

In the quarter ended June, the net profit of PNB Housing Finance stood at Rs 347 crore.

The company's asset quality improved significantly, with gross non-performing assets falling to 1.78% of gross advances at the end of the quarter, from 3.76% in the previous quarter. Similarly, net NPA ratio declined to 1.19%, as against 2.59% in the quarter ended June.

This was due to resolution of one large account on PNB Housing Finance's book. On the retail side, it was a function of aggressive collections and one-off retail write-off, the management said in a post-earnings analyst call.

In August, the lender resolved and recovered its large corporate non-performing account of Rs 780 crore. "Resolution in one large corporate account in Q2 FY24 and other accounts resulted in corporate gross NPA reduction by 96% YoY," the NBFC said in its investor presentation.

PNB Housing Finance Q2 FY24 Key Highlights (YoY)

• Total income rose to Rs 1,767 crore vs Rs 1,671 crore.

• Interest income at Rs 1,691 crore vs Rs 1,591 crore.

• Total expenses fell to Rs 1,258.6 crore vs Rs 1,333 crore.

The net interest income grew 1.8% year-on-year during the quarter under review to Rs 661 crore. On a quarterly basis, the NII rose 5.1%.

The company's assets under management increased 2.2% year-on-year to Rs 67,415 crore, as of Sept. 30. Sequentially, the AUM rose 0.1%. The loan book, too, registered 5.2% year-on-year growth to Rs 60,852 crore, driven by retail loans. The corporate loan book, however, fell 58% year-on-year.

PNB Housing Finance's net interest margin, a key measure of profitability, stood at 3.95%.

The company's credit cost stood at 0.26% in Q2, as against 0.36% in the previous quarter. A year ago, credit cost was at 1.51%.