Gagan Banga, Vice Chairman and Managing Director of Indiabulls Housing Finance, spoke to CNBC-TV18 about the financial results of Indiabulls Housing Finance.
“Our emphasis over the next few months is going to remain to reduce the commercial real estate (CRE) book and to the extent possible given market conditions allow, compensate that by largely micro, small and medium enterprises (MSME) focussed lending, which in our case is called loan against property (LAP) lending and a little bit of the home loan lending program that continues. Our disbursals from Q4 remains steady at about Rs 7,500 crore,” he said.
“On a net basis, we have been able to bring commercial real estate loans down by about Rs 4,000 crore so from a little over Rs 20,000 crore, it will be down to about Rs 16,000 crore,” Banga added.
In terms of retail loans, Banga said, “Balance is all retail loans split between home loans and LAP.”
“The retail loan book is static on an absolute value basis and the commercial real estate book has come down by a little bit,” he said.
When asked about the split between home loans and LAP within retail loans, he replied, “Roughly 60:20:20 between home loans, and the CRE book. So the 80 percent has stayed intact, the CRE book has come down a little bit.”
Speaking about profit and loss (P&L), he said, “We have additionally created provisions of roughly Rs 450 crore, partially towards some stage 3 assets and largely towards some stage 2 assets where we chose to create additional provisions. So the whole ideology continues to be that as we get large recoveries or large one-off kind of incomes, we will continue to remain conservative and use that to improve the provision coverage and that is a track record we have maintained over the last 5 years. We got a large recovery and most of that or a 100 percent of that actually we have put into additional provisions.”
On the liabilities front, Banga said, “Since September, we have raised about Rs 60,000 crore split about Rs 20,000 crore we have raised through securitisation, a little over Rs 20,000 crore. The balance is split equally between bonds and term loans. We continue to use those to routes. We have raised about a billion dollars of bonds in the last 6 odd months and we have also done some external commercial borrowing (ECB) through a dollar bond route, we are doing a dollar loan over the next couple of weeks. So the 3-4 routes we are really raising money from is securitisation, bank term loans and bonds. In the short-term what is also helping us with our liquidity is the very rapid run-off we are seeing in our commercial real estate book. As I mentioned since April it is Rs 6,000 crore. So that is also beefing up the Cash, which is at a very healthy Rs 28,000 crore.”