PNB Housing Finance Third Quarter Review

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The after-tax profit of PNB Housing Finance Ltd. in the third quarter of FY22 by 1.88 billion rupees (7% below expectations), decreased by 19% year-on-year and 20% quarter-on-quarter. The failure was due to lower-than-estimated net interest income, driven by a decline in spreads of around 30 basis points quarter-on-quarter, partly offset by lower-than-estimated borrowing costs.

Net interest income fell 19% yoy and 11% qoq to 4.15 billion rupees (20% below expectations). Provisions at Rs 1.3 billion were lower than our estimate of Rs 2.4 billion.

Disbursements decreased by around 5% QoQ to Rs 28.3 billion. As a result, assets under management decreased by 5% QoQ and 14% YoY to reach ~Rs 665 billion.

Gross and net non-performing assets of PNB Housing Finance increased by around 170 basis points and 155 basis points quarter-on-quarter to 7.6% and 4.9% (as a percentage of loans), respectively, with a ratio coverage of phase III provisions down 760 basis points to 36%.

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