PNB Housing Finance obtains refinance sanction of Rs 3,500 crore from NHB

PNB Housing Finance (PNBHFL) on Monday said it has received a long-term loan sanction of Rs 3,500 crore refinance facility from National Housing Bank. The facility will help PNBHFL boost liquidity as well as improve its asset-liability profile.

In FY18, PNBHFL had accessed Rs 1,500 crore refinance from NHB. NHB’s refinance constituted 7.83% of PNBHFL’s source of funds in FY16, before coming down to 5.36% on September 30, 2018.

“The company has sanction to raise another ECB of $300 million (around Rs 2,200 crore) and may also raise funds through deposit channels to align asset and liability profile,” said Kapish Jain, CFO of PNBHFL.

In October, the company had raised $200 million (Rs 1,470 crore) through external commercial borrowing (ECB), it’s first under the automatic route of RBI. In the 0-1 year bucket, PNBHFL’s asset-liabilities are broadly matched. However, in the 1-3 year bucket, there is gap of about 29% between the asset and liabilities profile.

The ALM maturity profile of 1-3 years show assets at Rs 18,820 crore while liabilities at Rs 26,664 crore, according a recent investor presentation by the company.

The company may approach NHB again of there is a need for more refinancing this year, Jain said. He, however, said the company’s liquidity position is comfortable at the moment. The housing finance company is making a concerted effort to reduce short term borrowing, which has come down 17.5% (of sources of funds) in March 2018 to 11.7% in Sept 2018.“On 1-3 year bucket, we are borrowing long term viz ECB, and more sticky public deposits and are comfortable with our mix,” the company said in a statement.

Punjab National Bank