Brief
PNB Housing Finance expects modest NIM boost after RBI rate hike, says MD Shukla
The lender anticipates a 5‑8 basis‑point margin rise and cites a new AAA rating that could lower borrowing costs.
By Felo News Desk · Published
PNB Housing Finance MD and CEO Ajai Shukla told PTI that the Reserve Bank of India's recent 25‑basis‑point increase in its benchmark lending rate to 5.5% will translate into a marginal improvement in the company's net interest margin (NIM).
What happened
The RBI raised its policy repo rate for the first time in almost four years, moving it from 5.25% to 5.5% to curb inflation linked to the West Asia crisis. Shukla said the benefit to PNB Housing Finance will not be the full 25 bps on the balance sheet but is likely to be between 5 and 8 bps.
What the reports add
Shukla explained that the lender's funding mix includes the Marginal Cost of Funds‑based Lending Rate (MCLR), commercial paper, refinance from the National Housing Bank and non‑convertible debentures, meaning only part of its borrowing cost rises with the repo rate. He also highlighted that the company recently received a rating upgrade from Crisil to AAA/Stable, joining three other agencies that now rate it AAA.
What was said
"Some benefit will go to the lender because all of the borrowing of the lender is not on the repo rate," Shukla told PTI. He added, "We have seen some good traction… Momentum is already there. Usually the mortgage business starts picking up from Ganesh Chaturthi… so H2 of the financial year is going to be much better than the first half."
How it came about
The rating upgrade, which brings AAA ratings from Crisil, India Ratings, CARE Ratings and ICRA, is expected to reduce the cost of term‑loan borrowing, which makes up about 40% of the lender's resources, and could lead to cheaper loans for customers.
Key facts
- The RBI raised its benchmark repo rate by 25 basis points to 5.5% (news18.com)
- PNB Housing Finance expects a 5‑8 basis‑point improvement in net interest margin (news18.com)
- The company received a rating upgrade to AAA/Stable from Crisil (news18.com)
- Term loans from banks account for about 40% of PNB Housing Finance's total resources (news18.com)
Sources
- [1] news18.com — originally reported as “PNB Housing Finance sees 5-8 bps margin improvement from rate hike: MD Shukla”
