PNB Housing Finance eyes South loan market

Cashing in on the burgeoning real estate market in Bengaluru, PNB Housing Finance — the housing finance unit of state-run Punjab National Bank (PNB) — aims to increase its loan book in the South market.

“Historically, we are a North-centric finance company. Now, we are bringing it to the South market. When I joined PNB Housing Finance in 2010, we had a massive market share of 77%, with business coming from the North. Now, it is only 40%,” PNB Housing Finance MD Sanjaya Gupta told DH.

Gupta explained, “Pan-India, we are equally distributed. Incrementally, we do 40% (business) from the North, 30% each from the West and the South. At portfolio level, we are 45% North-Central, but equally divided between West and South with 32% each.”

PNB Housing Finance’s loan book stood at Rs 27,000 crore as of March 31, 2016. According to Gupta, the asset quality of PNB Housing Finance is one of the best right now. Gross NPAs of the company stood at 0.22% against the industry average of around 0.78%.

The company has a fair exposure of over Rs 7,000 crore of loan book in Bengaluru, which accounts for more than 50% market share in South India. It has tied up with major developers to increase market share. After Bengaluru, the company is betting big on Hyderabad. Gupta says, after the bifurcation of Andhra Pradesh, Hyderabad is picking up very well. The division has cleared the confusion. As an industry, Gupta believes that a few cities account for 70% of the business, which comes from Mumbai, Pune, Bengaluru, Hyderabad, Chennai, Delhi-NCR.

 At present, PNB Housing Finance has 48 branches at 28 locations and employs close to 700 staff. Recently, PNB Housing Finance has filed its draft proposal with the market regulator for a Rs 2,500 crore IPO.

PNB holds a 51% stake in its housing finance arm, which was founded in 1988 as an NBFC. Private sector financial services firm Destimoney Enterprises held the remaining 49%, which it acquired in 2009.