Page 17 - Banking Finance December 2019

HOUSING

PNB Housing Finance in- GIC Housing Finance registers standalone net loss of Rs
creases Rs 2,500 cr from 9.97 cr Sept quarter
LIC via NCD Net loss of GIC Housing Finance reported to Rs
9.97 crore in the quarter ended September
2019 as against net profit of Rs 46.20 crore
during the previous quarter ended September
2018. Sales rose 3.66% to Rs 312.11 crore in
the quarter ended September 2019 as against
Rs 301.09 crore during the previous quarter
ended September 2018.

Bankruptcy Proceedings against Dewan Housing likely
PNB Housing Finance has increased
Rs 2,500 crore from LIC through to begun
secured redeemable non-convert- The central bank has said it will soon begin bankruptcy proceedings against
ible debentures (NCDs), making it Dewan Housing Finance Coporation Ltd (DHFL).
the second such issuance of the DHFL's owes its lenders nearly Rs. 1 lakh crore
housing finance company in this fis- ($14 billion), including several mutual funds,
cal year (FY20). “This issuance is banks, pension funds, insurance firms and retail
through private placement basis investors.
with a door-to-door tenure of 10
years and the proceeds will be The central bank's move on DHFL comes after
utilised by the company for its nor- a string of defaults by rival IL&FS last year,
mal course of business operations,” which triggered fears about contagion in the financial sector and forced the
the housing finance company said. government to take over the lender.
The first issuance of NCDs of Rs 500 "We are staring at a further liquidity crunch. Banks will now become even more
crore was subscribed by a foreign cautious about non-banking financial companies as going to bankruptcy court
bank. “The amount raised from LIC destroys values because the realisation may not be much," said the head of an
will be used by the housing finance Indian housing finance company.
company to enhance their liquidity The RBI said it had superseded the board of DHFL and appointed R Subramania
position and strengthen asset liabil-
ity management position,” said kumar, the former chief executive of state-run Indian Overseas Bank as the
Sanjaya Gupta, managing director administrator.
of PNB Housing Finance. In a media release, the RBI said it was taking the decision "owing to gover-
PNB Housing Finance has a capital nance concerns and defaults by DHFL in meeting various payment obligations".
adequacy ratio of 15.67 per cent as
of September 30. In this fiscal year, Vax Housing Finance records no net profit/loss in Sep-
PNB Housing Finance has raised Rs
27,000 crore, of which Rs 6,379 tember quarter
crore is through fixed deposits and Vax Housing Finance Corporation recorded no
Rs 5,899 crore through securiti- net profit/loss in the quarter ended September
sation of loan portfolios via the di- 2019 as against net profit of Rs 0.01 crore dur-
rect assignment route. It has raised ing the previous quarter ended September 2018.
Rs 3,000 crore through NCDs and Rs There were no Sales reported in the quarter
1,211 crore through external com- ended September 2019 and during the previous
mercial borrowing. quarter ended September 2018.

BANKING FINANCE | DECEMBER | 2019 | 17