In Wednesday’s intra-day trade, LIC Housing Finance shares plunged 13% to Rs 349.10 on the BSE on the back of heavy volumes after the company reported an unsatisfactory set of numbers for the September quarter (Q2FY23).

At 09:32 am, the stock traded 11% lower at Rs 356.20, compared to a 0.19% weakening in the S&P BSE Sensex. The average trading volumes at the counter soared over five-fold today. A collective 10.2 million shares changed hands on the NSE and BSE.

LIC Housing Finance’s Net Interest Income (NII) declined by 0.8% to Rs 1,163 crore in the quarter reported from Rs 1,173 crore a year ago. Its net interest margin also weakened to 1.8% in Q2FY23 from 2.0% a year ago. There appears to be a one-off in the interest income and total expenditures, leading to a decline in NII.

However, the company reported a 23% year-on-year hike in the net profit at Rs 304.97 crore in Q2FY23, predominantly due to a decay in provisions. It posted a net profit of Rs 247.86 crore in Q2FY22.

The firm’s gross Non-Performing Assets (NPA) declined to 4.91% as of September 2022 from 5.14% a year ago. The net NPAs were also down to 2.83% from 2.98% at the end of September 2021. The provision coverage ratio was virtually flat at 43.65% against 43.86%.

The total loan portfolio was up 10% YoY at Rs 2.62 trillion. Out of this, individual home loans produced 15%. Stage 3 exposure on default was at 4.90% vs 5.14% and 4.96% as on June 30, 2022.

Meanwhile, on October 31, LIC Housing Finance informed that the Reserve Bank of India has compulsory a penalty of Rs 5 lakh on the company on 21st October for non-compliance with certain requirements of ‘The Housing Finance Companies (NHB) Directions, 2010’.

NHB had scrutinised LIC Housing Finance’s financial position as on March 2020 and instituted that the company was unsuccessful in making the floating charge in favour of its depositors on a portion of the assets contributed by it “in terms of Section 29B of the NHB Act, and non-registration of such custody with the Registrar of Companies”.