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ICICI Securities Report
PNB Housing Finance Ltd.'s Q3 FY22 earnings delivery was weak and lower than expected. Profit after tax at Rs 1.9 billion was down 19-20% YoY/QoQ.
Interest de-recognition of Rs 0.79 billion and incremental lower spreads weighed on net interest margin compression, causing net interest income decline of 26% YoY/13% QoQ.
Most surprisingly, PNB Housing Finance's disbursement momentum derailed in Q3 FY22 that too in retail segment as well and the management articulated competition intensity as rationale for the same.
This, coupled with balance transfer run-rate of 18% and sell-down/run-down in corporate book, resulted in 5% QoQ decline in assets under management.
The Reserve Bank of India's revised asset classification norms led to stage-III assets inching up to 7.64%. Despite this credit cost was contained at less than 90 bps as expected credit loss provisions remained at 4.4%.
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