PNB Housing Finance Aims To Grow Retail Book To Rs 1 lakh Crore By FY27, Says CEO

Banking on high yielding affordable housing segment, PNB Housing Finance Ltd. plans to grow retail loan book to Rs 1 lakh crore by fiscal 2027, said Managing Director and Chief Executive Officer Girish Kousgi.

The company aims to diversify its loan book strategy, keeping profitability in mind and grow affordable housing and emerging market segment, while reducing its prime book.

As it plans to change its loan book mix, it aims to grow affordable housing book to Rs 15,000 crore, emerging segment to Rs 25,000 crore and prime segment to Rs 60,000 crore, Kousgi said.

For the current financial year, the housing financier plans to grow its retail book by 17% on year.

As on October 2024, the loan assets of affordable housing segment crossed Rs 3,000 crore and the intent is to grow it to Rs 5,000 crore by end of this financial year, which it has named 'Roshni'.

Within affordable housing segment, the company has laid out its risk strategies which will be yield accretive. Kousagi said that 20% of the business will come from high risk segment, 60% from medium risk and rest of the 20% from low risk.

"This will ensure that within the next 12-18 months time, our portfolio yield will be operating over 13% from 12.3%, currently," he said.

This shift to high yield products will help the company in profitability. It has guided its net interest margins at 3.5% for the next few quarters. For the quarter ended September, NIMs were 3.68% against 3.65% a quarter ago.

It also aims to add 200 branches in the affordable housing segment from 160 currently by March end, taking its total branch network in this space to over 300 by 2026-27.

As on the date, the housing financier has a total branch network of 303.

It has also planned to create a separate vertical of loans against property, which will comprise 27-28% of its total loan book. The housing company will start the vertical from April 1.

The introduction of LAP as a separate vertical within the retail segment aligns with the housing lender's strategy to grow profitability.

PNB Housing Finance wants to step back into the corporate loan space, but on a small scale and focus on few cities and top developers. The idea is to keep the corporate book under 10% at any given point in time, Kousgi said. The company will start this process in the next couple of months.

As on date, the company has loan assets worth close to Rs 70,000 crore. Of this, retail contributes to Rs 68,000 crore and corporate is Rs 1,500 crore. The company plans to grow its corporate book to Rs 7,000-8,000 crore in the next three years.

On its fundraising plans, Kousgi said that PNB Housing Finance remains well capitalised, but slightly changed its funding mix with more reliance on bonds, commercial papers and external commercial borrowings.