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Indiabulls home loan focus

Mumbai, Feb. 24: Indiabulls Financial Services Ltd (IBFSL) plans to sustain a 30 per cent loan growth over the next few years by expanding its footprint in the country.

The housing finance company, the third largest by size after HDFC and LIC Housing Finance, plans to approach prospective customers by being present at builder sites.

In May last year, IBFSL which was earlier a non-banking finance company (NBFC), had announced a reverse merger with its wholly owned subsidiary — Indiabulls Housing Finance Limited (IHFL). Housing finance or the mortgage business accounts for a larger share of its incremental loans.

Indiabulls’ focus on housing finance comes at a time major players such as HDFC and LIC Housing Finance are well entrenched in the market, and banks such as the State Bank of India are aggressively trying to grab more market share.

IBFSL believes it will be able to stand the competition and grow more than the industry rate of around 20 per cent.

A 30-per cent asset growth will translate into the growth of net interest income (NII), Ashwini Kumar Hooda, deputy managing director, IBFSL, told The Telegraph. NII, considered the core income of banking and finance companies, is interest earned minus interest paid.

Hooda said having an efficient distribution network was the key to success.

“Having a large network does not necessarily mean that an entity will be able to distribute the product,” he said. IBFSL is also increasing its direct sales team of 1,800 people and has a direct presence in over 800 builder sites.

According to Hooda, the company will not pursue businesses such as gold finance or micro-finance.

“Housing has huge potential in this country. It (housing finance) has helped improve our pace of growth and we have grown at 30 per cent. The company is confident that it can grow at this pace for many years to come. The other reason that we want to be in housing finance is that it originates safe assets. This can be seen from our gross NPAs which is only 0.77 per cent. We have clearly demonstrated to our rating agencies and lenders that we are not interested in pursuing any other opportunity but housing finance,” he said.

 
 
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