LIC Housing Finance net up 14%

LIC Housing Finance (LICHF) reported a 14 per cent rise in net profit to Rs 153.58 crore for the quarter ended December 2009 compared with Rs 134.33 crore in the year-ago quarter.
Over the same period, disbursements grew by 86 per cent to Rs 3,604 crore, while sanctions grew 72 per cent to Rs 4,516 crore.
However, provisions jumped to Rs 15.83 crore compared with Rs 74 lakh in the corresponding period last year.
Gross non performing assets (NPAs) as a percentage of advances were 1.44 per cent as of December 2009 as against 1.69 per cent in December 2008.
The outstanding mortgage portfolio as on December 31, 2009, was Rs 34,166 crore as against Rs 25,335 crore a year ago, registering a growth of 35 per cent.
Net interest margin improved to 2.76 per cent from 2.44 per cent at the end of the December 2008 quarter.

HOME LOANS | Advantages of Joint Ownership

There are many advantages of taking a home loan in joint name. There are tax benefits, joint benefits etc.
Tax benefit:
If the owned property is being used for living, the annual value of the said property is deemed to be nil. Moreover, you could claim a deduction for the interest paid on the home loan (for purchase or construction) up to Rs.1.5 lac, (subject to conditions). This would result in a loss under the head - house property of up to Rs.1.5 lac, which could be set off against other incomes.
If the property is let out, the actual amount of housing loan interest, without limit, could be claimed as deduction. Also, an individual can claim a deduction up to Rs.1,00,000 for re-payment of the principal amount u/s 80C of the Income Tax Act, 1961.
Joint benefits:
It is very advantageous to buy a property in joint name as each individual has the right to claim tax benefits. So if a property is owned by husband and wife together then both are entitles to claim deductions individually.
There is no rule as to the number of co-owners or who the co-owner is (brother, spouse or parents).
Following are the points to consider:
• The house should be bought in the joint name and care should be taken to keep the proof of co-ownership.
• The housing loan should be taken in joint names.
Repayment
The repayment of the loan should be done individually or from their joint bank account. The funds in the account should be contributed by the co-owners in proportion to their ownership/loan. Co-owners should have their independent sources of income from which the loans are re-paid.
Tax benefits are available in proportion to the joint ownership and the loan taken by the co-owners.
Additional benefits:
• If more than one person takes a home loan then income of all the co-owners will be considered by the lenders. This can help increase the size of the loan.
• In many states, a lower property registration fee is levied in case the property is owned by women either individually or jointly.
If husband and wife jointly own a property reduces the succession issues.
• Buying a house jointly facilitates a larger loan as income of all the co-owners would be considered by the lenders.

32% net up in Quarter3 for HDFC Bank

Strong loan expansion in Home loan and Personal Loan and lower interest expenses helped HDFC Bank report a third quarter net profit of Rs 818.5 crore, a growth of 31.6% over Rs 621.7 crore in the corresponding period last year. Outstanding loans rose to Rs 1, 21,051 crore, a growth of 21%, for the past 12 months. For the first three quarters, the growths in advances were at 20% as against an 8.8% growth for the banking system.
Gross non-performing assets as of December declined to 1.6 per cent of gross advances as against 1.9 per cent a year-ago.
“Sequentially, we have grown 5%. Corporate advances have grown 30% while retail was at 11%,” Paresh Sukthankar, executive director, HDFC Bank, said. He added that retail growth would have been higher at 17-18%, if the unwinding of the erstwhile Centurion Bank of Punjab’s retail portfolio were to be factored in.
“Overall numbers are in line with the expectations. Current and savings accounts deposits (CASA) have gone up by 130 bps on Quarter on quarter basis. The asset quality improved vis- a`-vis that in the previous quarter. Its restructured assets form only 4% of advances, which is probably the least in the industry,” said Rajiv Mehta, research analyst, India Infoline. The bank is among the few which has been growing its retail book.
The retail products that have seen a larger growth are car loans and home loans. However, retail loans comprised half the overall advances. Mr Sukthankar feels that although retail credit will pick up even more, corporate loans will continue to grow slightly faster than retail.
Fee-based income grew by 12.4 per cent to Rs 723.7 crore in Q3 FY10 as compared to the year-ago period and emerged as a major contributor to the overall growth along with the net interest income, HDFC Bank, Executive Director, Paresh Sukthankar told reporters.
The CASA deposits of the bank is at 49% as against 40% last year, among the highest in the banking system. The bank has shown a 9.19% dip in other income at Rs 853 crore due to revaluation and sale of investments. The main components of the other income were fees and commission at Rs 723.7 crore (up 12.4%). The net interest margins grew to over 4.3% as against 4.2% last year. The bank stock closed at Rs 1,691 up by 0.33% in the Bombay Stock Exchange.
Provisions have seen a fall of 15.8% to Rs 447.72 crore in the third quarter. Both the gross NPAs and net NPAs have also seen a fall. The NPA coverage ratio which was at 71% has risen, according to Mr Sukthankar, to 72%. He added that that it does appear that the worst is behind us.

RBI sees anxious about home loan rates

The perform among commercial banks of attract customers with beneficial interest rates on housing loans only to convert it into floating rates later is a cause for concern, Reserve Bank of India Deputy Governor Usha Thorat said Tuesday.
"In the area of housing loan, teaser rates are increasingly being offered which is a cause for concern," said Thorat at a banking conclave in Mumbai.
"I hope banks are ensuring that borrowers are well aware of the implications of such rates and the appraisal takes into account repaying capacity of the borrowers when the rates become normal."
RBI’s concern can perhaps be traced to the fact that the genesis of the mortgage crisis in the US lay in home loan extended to borrowers who struggled to repay. These loans, popularly known as sub-prime loans because they were given to people in lower income groups, included so-called adjustable rate mortgages where the repayment is low in the initial months with installments rising in subsequent months, somewhat similar to teaser rates.
Lenders in India, however, say there is no cause for concern as far as quality of lending is concerned since repayment capacity is assessed based on the overall liability and not the first year’s rate. Many leading lenders, including the State Bank of India (SBI), ICICI Bank, Canara Bank, Punjab National Bank and Housing Development Finance Corporation (HDFC), have recently introduced such special offers to attract borrowers at a time when demand for loans from individuals and industries has been tepid.
The shift from lower Home loan interest rates to floating rates has often resulted in the monthly installments of borrowers to shoot up by as much as 50 per cent, along with the risk of the tenure of repayment also getting extended by several years.
Major housing loan providers including State Bank of India, which controls about 25 percent of the total loans and deposits of the country, and top private institutions like ICICI Bank and HDFC have been offering such teaser interest rates.