India's PNB Housing Finance posts 46% surge in Q2 profit on strong loan demand

BENGALURU (Reuters) - India's PNB Housing Finance reported a 45.8% rise in the second-quarter profit on Monday, aided by healthy demand for home loans and improved asset quality.

The Indian mortgage lender said its consolidated net profit after tax rose to 3.83 billion rupees ($46.06 million) for the quarter ended Sept. 30 from 2.63 billion rupees a year earlier.

Net interest margin, a key measure of profitability, stood at 3.95% for the quarter.

Investment in real estate has been strong amid relentless demand for housing and growing consumer confidence even as borrowing costs remain high.

The Reserve Bank of India kept its key lending rate steady for a fourth consecutive policy meeting earlier this month but signalled it would keep rates high and liquidity tight to rein in inflation. It has raised rates by 250 basis points since May 2022.

PNB Housing, a unit of state-run lender Punjab National Bank said its net interest income rose 2% to 6.61 billion rupees for the September quarter.

Its asset quality improved, with gross bad loans as a percentage of total loans slipping to 1.78% at the end of September, from 3.76% at the end of June.

Total disbursements for the quarter jumped 16% year-on-year basis to 41.80 billion rupees during the quarter.

In August, the lender resolved and recovered its large corporate non-performing account of 7.84 billion rupees.

Parent Punjab National Bank is due to report its second-quarter earnings on Thursday.

Shares of PNB Housing Finance closed 4.3% lower ahead of the results, while the stock has gained about 62% so far this year.

($1 = 83.1513 Indian rupees)

(Reporting by Dimpal Gulwani in Bengaluru; editing by Eileen Soreng)