PNB Housing Finance asked builders to start selling, as the demand for home loans is almost returning to pre-covid levels. MD and CEO of the company Hardayal Prasad said that the economy is slowly picking up, and in many areas, economic activity will soon return to normal. He also added the company is now almost 80-85% of its pre-covid levels.
PNB Housing Finance, which has both corporate finance and construction finance, is closely monitoring the inventory of builders as the ability of builders to finish projects on time which has become a major factor now. The supply of inventory in the country is pretty large. Attractive offers like free car parking, incentives, and even zero stamp duty in some states have instigated buying activity. There is a high demand for projects that are 70-75% completed. People are even ready to buy projects that are almost 70% complete. New or projects less than 70% of work completed is of less interest to buyers.
On loan demand, Prasad said that the company had reached pre-covid levels in October itself. He also added that the company had seen a 10-20% increase in home loan applications, sanctions, and disbursements on a month-on-month basis from June to October.The company reported 17,063 log-ins in the last quarter compared to 5,071 in the first quarter. The number of home loan applications in the March quarter was 20,165. In the September quarter, PNB housing finance sanctioned 11,733 loans against 3,288 loans in the June quarter. Loans sanctioned during the January-March quarter was 14,226. Disbursements in June quarter rose from Rs 694 crore in June quarter to Rs 2,444 crore in September. In the March quarter disbursements were Rs 2,826 crore.
Prasad said that the company is expecting the numbers to grow in the festive season as well but looking forward to February or March numbers as there is no growth due to COVID-19 and other reasons. However, getting back to pre-covid levels is a good sign. PNB is also witnessing high demand from Tier II and tier III markets.
With the rebalancing of the portfolio, the average ticket size of loans has reduced to Rs. 1 lakh. It is very significant in individual housing as it indicates demand coming from the low-income class. He added that the loans for up to Rs. 35 lakhs has become a strong portfolio.
The company is making efforts to reduce corporate loans portfolio and increase the retail book to focus on lower risk-weighted accounts. Prasad previously stated that the company is closely watching its corporate book to bring down the corporate loan share towards the end of this fiscal year.