Graphic: Naveen Kumar Saini / Mint
PNB Housing Finance Ltd managed to avoid some of the fears of its liquidity positions by reporting a strong earnings in September. With the help of a healthy 43% growth in asset management, the home loan lender recorded a 33% growth in net profit and a 25.4% increase in core revenues.
That said its spending slowed to 14% with 25% in the previous quarter, suggesting that the lender is not firmly based on liquidity.
In fact, analysts believe that their spending could be further slowed due to the pressure on liquidity.
PNB Housing Finance has a low level of 530 crushers for a period of one to three months and a cumulative gap of ₹ 900 crore in less than one year of tenor. In other words, the company will have to approach the amount of ₹ 900 crore liquidity in order to maintain credit growth.
Analysts at Jefferies India Pvt. Ltd. noted that the share of commercial paper (CP) in total borrowing of PNB Housing Finance fell to 13% with 17%.
This is linked to the fact that the lender could have raised more than £ 6,000 crude over CPs in the past month to provide comfort to investors.
Nonetheless, borrowing costs have increased and this would curb the margins and spread. Management led to differences of 205-215 basis points.
This brings us to a bad credit position. PNB Housing Finance had a decent ratio of bad loans and continues to do so. Its fast bad loans as a percentage of loans were only 0.45%.
This could be endangered because it has a 280-watt display for Supertech Ltd., a troubled developer. Exposure is categorized as a standard.
Non-housing loans grew faster at 54%, and loans and property finance were on them. While the loan book is varied, the lender has seen faster growth in the risky part of the book.
The Bank's financial assets in the PNB were under pressure with other shares of NBFC (non-banking financial company) in September when liquidity was related to pummeled NBFCs.
A fall of 30% in September in residential savings of PNB has made modest estimates and traded more than 1.7 times the estimated book value for FY20.