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BENGALURU (Reuters) – India’s LIC Housing Finance Ltd reported a 37% decline in third-quarter profit on Monday, hit by higher financing costs and as impairment charges more than doubled.
The company, a unit of Life Insurance Corp of India, said net profit fell to 4.80 billion rupees ($58 million) in the quarter ended Dec. 31, from 7.67 billion rupees a year earlier.
The Mumbai-based lender said its impairment costs on financial instruments surged 114.5% to 7.63 billion rupees.
However, the bigger dampener on results was from finance costs that surged 19.4%, accounting for 80% of total expenses, which increased 28.6% to 52.83 billion rupees.
Housing demand has remained strong in India, despite a flurry of interest rate hikes last year, as a burgeoning rising middle class buys real estate. But higher funding costs have compressed net interest margins and net interest income.
LIC Housing’s interest income rose 16.8% to 58.39 billion rupees in the quarter.
The company’s shares closed down 2.9% ahead of the results on Monday. They have fallen just over 6% so far this year, less than half the roughly 12% drop in LIC’s shares. ($1 = 82.7440 Indian rupees)
(This story has been corrected to change impairment charge to 7.63 billion rupees from 76.3 billion rupees in in paragraph 3)
(Reporting by Biplob Kumar Das in Bengaluru; Editing by Savio D’Souza)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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