LIC Housing Finance likely to recover Rs 3,000 crore worth NPAs

The target is to get back about 50 per cent of gross non-performing assets (GNPAs), Managing Director and Chief Executive Siddhartha Mohanty said.

LIC Housing Finance is likely to recover about Rs 3,000 crore from borrowers in the current financial year to improve asset quality, an uphill task in a year when the Indian economy is expected to contract.

The target is to get back about 50 per cent of gross non-performing assets (GNPAs), Managing Director and Chief Executive Siddhartha Mohanty said.

LIC HFC’s asset quality profile came under pressure with GNPAs rising to 2.86 per cent in March, from 1.54 per cent a year ago. Net NPAs also went up to 1.99 per cent, from 1.08 per cent. Its total outstanding portfolio stood at Rs 2.1 trillion in March, up from Rs 1.9 trillion last year.

LIC HFC’s provisions for expected credit loss stood at Rs 2,612.39 crore as of March 31, as against Rs 1,659.48 crore a year ago.

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Mohanty said the asset quality might face further pressure due to risk slippages from part of the loan portfolio, which is under moratorium. At present, about 25 per cent of loan book is under moratorium. The RBI has permitted HFCs, finance companies, and banks to grant moratorium on term loans for EMIs till August to soften adverse effect on borrowers due to the lockdown.

While calculating expected credit loss, the company has taken into account its historical experience of losses, updated to reflect current conditions and moratorium.