In a bid to scale new heights, PNB Housing Finance is projecting robust growth in its retail book, targeting a whopping Rs 1 lakh crore milestone by 2026-27. This ambitious goal comes as the company aims to capitalize on the growing demand for affordable housing and maintain its strong asset quality.
Robust Growth Prospects
PNB Housing Finance is confident of achieving 18% retail growth in FY26, driven by its strategic focus on affordable housing. The company plans to disburse Rs 22,000-23,000 crore across segments this year, with a significant chunk allocated for affordable housing. In fact, the affordable book grew an impressive 143% year-on-year, with the company aiming to take it to Rs 9,500 crore by December and Rs 15,000 crore by FY27.
Asset Quality and Recovery
On the asset quality front, PNB Housing Finance has made significant strides in recovering written-off pools. In the first quarter, the company recovered a substantial Rs 57 crore, with a target of over Rs 300 crore for the year. This will come from both retail and corporate exposures, demonstrating the company’s commitment to maintaining a healthy asset book.
Net Interest Margin Guidance
Despite yield moderation and the impact of rate transmission, PNB Housing Finance has raised its net interest margin guidance to 3.7% for FY26, up from the earlier guidance of 3.60-3.65%. The company has successfully passed on 10 basis points to customers, having gained 8 bps from rate cuts. Transmission benefits will continue in Q2, further boosting the company’s net interest margin.
Capital Adequacy and Fundraising
PNB Housing Finance has a strong capital adequacy ratio of 29.68% as on June 30, with tier-1 capital at 28.96% and tier-II capital ratio at 0.72%. The company has no plans to raise fresh equity capital in FY26 but will continue its routine debt-based fundraising via term loans, NCDs, and ECBs. This will enable the company to maintain its strong capital position and support its growth aspirations.
In conclusion, PNB Housing Finance’s robust growth prospects, strong asset quality, and commitment to affordable housing make it an attractive player in the Indian housing finance sector. As the company continues to scale new heights, it is well-positioned to capitalize on the growing demand for housing finance in India.
Originally published on https://www.financialexpress.com/business/banking-finance-pnb-housing-aims-rs-1-lakh-crore-retail-book-by-fy27-eyes-rs-9500-cr-in-affordable-loans-by-december-3923093/
