PNB Housing aims for a 4x growth in corporate loan book to Rs 3 000 cr

Mumbai, Nov 1 (PTI) PNB Housing Finance is aiming to expand its corporate loan book by over four times to around Rs 3,000 crore by the end of March 2027, a top official has said.

    The company will continue to focus predominantly on retail housing finance even as it accelerates its corporate loan book.

    "We expect the corporate loan book to reach around Rs 3,000 crore by the end of this financial year," Ajai Kumar Shukla, Managing Director and Chief Executive Officer of PNB Housing Finance, told PTI in an interview.

    Its corporate loan book more than doubled to Rs 689 crore in the year to September 30, 2026.

    The corporate loan portfolio accounts for around 3 per cent of the company's overall loan book, which stands at approximately Rs 95,000 crore.

    Shukla expects the share of corporate lending to increase to 8-10 per cent over the next three years, while retail lending will continue to contribute 90-92 per cent of its portfolio.

    "The corporate loan book is still very small compared with our overall loan book," Shukla said, adding that the business had commenced only around six months ago and was growing from a relatively low base.

    He said the sharp growth in the corporate portfolio in percentage terms should be seen in the context of its small initial size.

    The company expects to gradually scale up corporate lending, with the segment potentially accounting for around 5 per cent of the loan book at an intermediate stage before reaching 8-10 per cent over the next three years.

    On the overall business outlook, Shukla said PNB Housing Finance is maintaining its loan growth guidance of 18-20 per cent for the financial year.

    The company has already achieved loan growth of 19 per cent and would like to exceed its guidance, although it is retaining the current target, he added.

    He said the company had not witnessed any significant impact on loan demand following the recent 25-basis-point repo rate increase by the Reserve Bank of India (RBI) in October's monetary policy and expects demand in the second half of the financial year to be better than in the first half, supported by the festive season.

    "We are closely monitoring competition, and most institutions are performing better than they did in the second quarter," Shukla said.

    "The rate increase may not dampen or reduce overall market demand. Typically, demand improves in the third and fourth quarters because of the festive season," Shukla added.

    On the impact of rising interest rates, Shukla said borrowing costs would increase, but the company will also have the flexibility to revise lending rates.

    Around 60 per cent of a repo rate increase is expected to translate into higher borrowing costs for the company, Shukla said.

    For instance, a 25-basis-point increase in the repo rate could result in an increase of around 15 basis points in borrowing costs, he pointed out.

    The company expects a marginal improvement in net interest margins as it passes on higher interest rates to existing borrowers, although the benefit is likely to materialise gradually.

    Shukla said the company's borrowing mix is well diversified, with around 39 per cent of borrowings linked to external benchmarks, and it does not expect any significant change in the overall composition.

    "The overall mix should remain broadly similar to the current levels disclosed in our financial statements," Shukla said.

    On recoveries, he said the retail recovery pool declined to around Rs 320-330 crore, while only two to three corporate cases remained in the recovery pipeline.

    Consequently, recoveries in the second half are expected to remain broadly similar to those in the first half, given the shrinking pool, he added.

(This story has not been edited by THE WEEK and is auto-generated from PTI)