Please note that this conference is being recorded. I now hand the conference over to Mr. Chaitanya Yadav, National Head of Corporate Planning and Investor Relations. Thank you, and over to you, Mr. Yadav.
Thank you, Reeju. Good morning, and welcome, everyone. We are here to discuss PNB Housing Finance Q4 and FY 2025/2026 results. You must have seen our business and financial numbers in the presentation and the press release shared with the Indian stock exchanges and are also available on our website. With me, we have our management team led by Mr. Ajai Kumar Shukla, Managing Director and CEO of the company. We will begin this call with the performance update by the management team, followed by an interactive Q&A session. Please note this call may contain forward-looking statements which exemplify our judgment and future expectations concerning the development of our business. These forward-looking statements involve risks and uncertainties that may cause actual developments and results to differ materially from our expectations. PNB Housing Finance undertakes no obligation to publicly revise any forward-looking statements to reflect future events or circumstances.
A detailed disclaimer is on slide 46 of the investor presentation. With this, I will now hand over the call to our MD and CEO, Mr. Ajai Kumar Shukla. Over to you, sir.
Good morning, everyone. It's a pleasure to address you today as we reflect on the significant developments shaping India's housing finance landscape and share our performance for the quarter and the full year. FY 2026 has been a pivotal year for the housing finance industry. The sector continued to benefit from strong structural drivers, rising urbanization, improving affordability, and a clear shift towards homeownership across income categories. Tier two and tier three cities, in particular, remained strong demand centers, supported by improved infrastructure and increasing economic activity. Government initiatives and supportive regulatory measures have further strengthened the environment for affordable housing. A softening interest rate cycle, supported by steady economic activity, has helped sustain healthy credit growth across the sector. It may also be worth noting that the ongoing geopolitical conflict may have an impact on growth projections for all sectors, including housing finance sector.
The crude oil process may keep inflation and interest rates elevated and may also marginally impact asset quality. However, if the situation remains contained, the overall impact is likely to be moderate and transient, with underlying housing demand remaining structurally resilient. Overall, the industry is on a strong growth trajectory, with particularly high potential in the affordable and emerging market segments, areas where we have built strong capability and remain strategically well-positioned. Now talking about the PNB Housing Finance, despite the pricing pressure in the market, the company has shown a strong and balanced growth during the year. The retail loan book grew by 16% YoY to INR 86,946 crore as on 31st March 2026. The total loan book of the company stood at INR 87,347 crore as on March 2026.
The affordable and emerging market segment continued to increase their share in retail loan assets and is at 40% as on 31st March 2026, compared to 37% as on 31st March 2025. The disbursement during Q4 grew by 36% YoY and 50% quarter-on-quarter to INR 9,355 crore. During the quarter, overall retail segment disbursement grew by 32% YoY to INR 9,020 crore. Within this, the affordable rebounded and grew by 59% quarter-on-quarter to INR 1,249 crore, which is largely flat as Q4 2025. We are back on growth path for affordable segment and expect to deliver similar performance going forward. The emerging market segment continued to outperform, delivering a strong 34% YoY growth in disbursement. The prime segment delivered 43% YoY growth despite the broader pressure on yield following the rate cuts. Overall retail disbursement growth for full year came in at 19%.
Happy to share that we have facilitated 5,000 subsidies under PMAY, marking a significant milestone in our journey towards enabling affordable housing and supporting the government of India's Housing for All mission, supported by National Housing Bank. The company restarted corporate segment with disbursement of INR 335 crore in Q4 2026. The corporate loan book stood at INR 401 crore as on March 2026. Presently, our digital channels generate nearly 15% of our overall leads. With focused digital transformation, we further enhanced our onboarding process with the launch of Infinity Application, which is in-house developed by our team. This fully digitized, paperless workflow is now fully adopted by our in-house sales team and is helping us materially reduce turnaround times and operating costs while significantly improving customer experience.
We are also in the process of onboarding all our direct selling agents to the platform. In addition, we deployed an AI-enabled calling solution for sanctioned but not disbursed cases, engaging 70% of our identified pool and securing disbursement confirmation from 50% through intelligent outreach and targeted WhatsApp follow-ups. We continue to embed AI-led initiatives across the end-to-end loan processing life cycle. During the quarter, multiple use cases were on pilot run, including AI-driven calling for e-KYC, pre-delinquency management, top-up offerings, and fresh sales lead conversion. As far as geographical presence is concerned, as planned, we opened 35 branches taking the total network to 393 branches, including 229 in affordable segment, 87 in emerging market segment. Our extensive pan-India footprint enable us to effectively capitalize on the growing opportunities in the affordable and emerging market segment, particularly across high potential tier two and tier three locations.
In future also, we'll keep on focusing on increasing distribution, but priority is to bring the existing distribution of lead branches more productive. Asset quality. I'm pleased to share that we achieved a significant milestone during the year. Our GNPA continues to improve and is now below 1% mark, standing at 0.93% as of March 2026. This improvement is a direct result of our strengthened collection infrastructure and continued emphasis on portfolio quality across both retail and corporate segment. Recoveries remain strong, driven by focused collection and resolution efforts. In Q4 2026, we recovered INR 24 crore from retail written-off pool and INR 143 crore from the corporate written-off pool. For the full year 2026, total recoveries from written-off pool accounts stood at INR 332 crore, resulting in a negative rate cost of 45 ps.
Operationally, momentum strengthened further with the sale of 689 retail properties during the year, compared to 537 in 2025, underscoring improved execution across recoveries. The company has a remaining written-off pool of around INR 500 crore in corporate and around INR 325 crore in retail. As far as margin is concerned, this spread reduced by 10 bp s quarter-on-quarter from 2.2% to 2.12% due to lower incremental yield and BT pressure in prime business. In our view, the yield have bottomed out and should start improving from Q1 2027. Net interest margin improved by six bp s quarter-on-quarter in Q4 2026 to 3.69%. As far as profitability, in financial year 2026, profit after tax increased by 18% YoY to INR 2,291 crore, leading to a ROA of 2.66% and ROE of 12.73%. The capital adequacy ratio is 27.26%, and tier one is 26.89% as of March 2026.
Glad to share, the board of directors recommended a dividend of INR 8 per equity share, having face value of INR 10 for FY 2026, subject to the shareholder approval during next AGM. I would like to present the guidance for 2026/2027. Given the industry outlook and our business performance so far, the guidance would be, we are looking for loan book to cross more than INR 1 lakh crore mark in 2027. Retail loan book projected to grow between 18%-20%. NIM would be in the range of 3.5%-3.65%. Credit cost continue to decline due to recoveries from written-off pool, and ROE will be in the range of 2.4%-2.5%. With this, I would like to hand over the call back to Chaitanya. Thank you so much.
Thank you, sir. I will now request Mr. Vinay Gupta, our CFO, to talk about the financials.
Good morning, everyone, and very warm welcome to our earnings call. I am pleased to share our strong Q4 and FY 2025/ 2026 financial performance, reflecting continued focus on execution and the underlying resilience of our operating fundamentals. Let me begin with business growth. As highlighted by MD sir during his opening remarks, Q4 FY 2026 has been one of the best quarters in terms of disbursements, as we achieved 36% growth year-on-year in the current quarter. Similarly, our loan book also grew 15% year-on-year, including retail disbursements growth of 16% year-on-year. Moving to key financial parameters. You would have seen net interest income has grown 11% during Q4 FY 2026 and 13% for the full year FY 2026. Yields moderated this quarter by 25 bps to 9.47% in Q4.
This is largely due to lower incremental yield versus book yield and higher runoff. It seems that yield has now bottomed out and now it should start improving from Q1 with higher mix of emerging and affordable business. On the liability side, cost of borrowing improved by 15 bps sequentially to 7.35%, supported by gradual repricing with banks and transmission of policy rate cuts. For the full year, cost of borrowing improved by 29 bps to 7.57% in FY 2026, compared to 7.86% in FY 2025. However, the incremental cost of borrowing edged up slightly to 7.23 in Q4 from 7.2 during previous quarter, in line with the current prevailing liquidity and market conditions. As a result, spread moderated by 10 bps to 2.12% in Q4 compared to 2.22% in Q3, while remaining broadly stable at 2.2% for full year FY 2026.
Net interest margin improved by six bps in Q4 FY 2026 to 3.69% compared to 3.63% during the previous quarter. This one-off inverse relationship between spread and NIM is due to difference in methodology. The spread is measured on a daily interest convention, whereas NIM benefits from monthly averages, which should smoothen out from the next quarter onwards. Operating expenses grew by 13% year-on-year to INR 920 crore, compared to INR 813 crore in FY 2025. This was largely driven by branch additions that we did in the later part of FY 2025, and a one-time impact of implementation of New Labour Codes. We added 35 branches in Q4, the full cost of which will be visible from next financial year onwards. However, we expect operating leverage and scale benefits to kick in from existing business to partially offset these costs.
Our OpEx to ATA for Q4 is at 1.08 and full year is at 1.05. We expect it to remain range-bound between 1%-1.1%. Pleased to report a successful recovery of around INR 157 crore in Q4 and around INR 330 crore during full year FY 2026, which translated into a negative credit cost of 78 bps in Q4 and 45 bps for the full year FY 2026. Our GNPA improved further, crossing the milestone of sub-1% level and now stands at 0.93%. Further, there is marked improvement across all segments in 30+ and 90+ metrics. Affordable business is also now showing signs of stabilization across all delinquency metrics. Profitability remains strong.
The reported PAT for Q4 is INR 656 crore, 19% year-over-year growth, and 26% sequential growth. For full year, our net profit grew 18% to INR 2,291 crore. ROA improved to 2.66% for FY 2026 compared to 2.55% in FY 2025. ROE stands at 12.73% in FY 2026. Our total CRAR stands at 27.26% with Tier 1 at 26.9%. As of March, our net worth stood at INR 19,219 crores, and our book value increased to INR 738 per share. Thank you for your continued support, and I now hand over the call back to Chaitanya.
Thank you, Vinay. Ran, we can now open the call for the Q&A, please.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on a touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Sucrit D. Patil with Eyesight Fintrade Private Limited. Please go ahead.
Good morning to the team. I have two questions. My first question to Mr. Shukla is, what are your key priorities for PNB Housing in the year ahead or in the quarters ahead, to be very specific? Specifically, how do you plan to expand lending reach, improve customer service, and use digital platforms to make housing finance more accessible and transparent to all? That's my first question. I'll ask my second question after this. Thank you.
Yes, Sucrit. Thank you so much. I think partial answer was embedded in your question itself as to how we can improve our footprint and increase the business. First of all, this use of digital and automation I think would be the key success mantra. As I explained in my talk that we have started using Infinity app, which is an onboarding app, which is end-to-end digital app, which will save a lot of time of force on field. At the same time, the LOS, which is a loan origination system, will also help fast processing. We are now introducing end-to-end from sourcing to processing to disbursement, end-to-end digital. There will be no paperwork which will be involved, which will save a lot of time of my field force so that they are more on the field and generate more number of leads.
In fact, they need not to visit the office for deposit of files for processing from. It means whenever they are meeting with a customer, they can go and meet with the other customer by completing the work at one place where they are sitting with a customer and then they can move to the other customer. That will give the efficiency not only in terms of sourcing, but processing also. The three key priorities would be definitely, as we said that we are looking for the growth of 18%-20% growth in AUM. The mantra would be growth with quality. Quality should impact. We have reduced our GNPA from 1%-0.93%.
We'll put more focus on to improve it further. Also, the third key priority would be to make our existing branches and distribution more productive because we have almost 393 branches as of now, and we can easily scale up our business by using this current infrastructure.
Thank you. My second question to Mr. Gupta is, again, a forward-looking one. How are you approaching risks such as rising funding cost, regulatory compliances that keeps on changing over time, and credit defaults while ensuring profitability remains steady and growth remains constant for the company? Thank you.
Sucrit, thank you for the question. See, in Q4, you would have seen that we were able to still reduce our borrowing cost by around 15 bps, and it now stands at around 7.35. We still have some scope as our incremental cost is still lower than the overall portfolio cost, so there is still some scope. We are also working with credit rating agencies to see based on the performances, there is an opportunity for improvement in the credit rating as well that will further help on the cost of borrowing. At the same time, we are keeping adequate liquidity buffers and keeping the adequate LCR to ensure that the company has adequate liquidity cover in the times of need.
At the same time, we are also working on enhancing our distribution and our resource profile by adding more banks and going more towards that market and diversifying our funding.
Thank you, and best wishes.
Thank you.
Thank you.
Thank you. Next question comes from the line of Viral Shah with IIFL Capital. Please go ahead.
Yeah, hi. Congratulations on a good set of numbers, and thank you for this opportunity. Ajai, I had two questions. One is, can you give, say, more details of your growth guidance at a segment level, specifically how you are thinking about, say, the affordable and the emerging segment, and also the disbursement growth kind of outlook over there. The second question is, if you can give some more color on the corporate disbursements that we did of INR 335 crore this quarter. Is this just one single account or multiple ones? Yields? Which kind of geography is the builder in or the project is in? Thank you.
Yeah. Thank you, Viral. Thank you so much. Growth, if I talk about segment-wise, we will grow almost 50% in affordable segment. That's what we are targeting. Like we did almost INR 3,800 crore approximately disbursement in the last year, so let's say we are expecting to grow by 50%. Our overall composition of affordable plus emerging, currently we are at 40%. We grew from 37%-40%. Down the line two years, we are expecting that we should be having composition of 50/50 percent. Growth in emerging plus affordable would be high. More particularly, more so the affordable growth will be much higher than emerging. If I talk about sequentially, the growth in prime would be lesser, the growth in the emerging would be high, and affordable will be the highest growth. That is not only area, but also in terms of disbursement.
If I talk about corporate disbursal last year, we dispersed one case of almost INR 360-INR 370 crore, which is primarily of Mumbai. Our focus would be more on reputed good builders of the cities. We will be targeting almost seven to eight top category cities where the market is good, sellability is high, and the quality of developer is also good. If I talk about geographical presence, we will be having presence in Pune, Bombay, Bangalore, Chennai, Hyderabad, Delhi. These are the typical cities where we will be focusing as far as our corporate business is concerned. Still our focus on the retail segment will be much high. Even if we have entered into corporate finance business, our corporate finance business, this year 2027 will not be more than 3% of my overall book.
Right. Can you just also mention the yields at which this loan was given, the corporate one?
See the corporate business, the idea of ours is to maintain the overall yield of almost 11.75%-12% because we don't want to go beyond that price band. Because if we go beyond price band, that means we have to focus on more Tier C and Tier B kind of builders, which we don't want. It would be in the range of 11.5%-12% range only.
Got it. If I may, can I ask one more question?
Yeah, please.
Basically on the margin front, just wanted to check, how are you thinking, first of all, given how the market rates are, the bond markets, first of all on cost of funds? Secondly, given how now the book mix probably will be changing, especially with the re-entry into the corporate finance segment, is there a scope for, say, some higher margins versus what was guided?
Yeah. As we mentioned, on the yield front, we expect that the yields have now bottomed out, and it should start improving from here because now our incremental yield and book yield has coincided with the higher mix coming in from affordable, emerging, and corporate now. I should see our yields improving going forward. On the cost of borrowing front, there are certain headwinds right now considering the current liquidity conditions, and most of the benefits that we were supposed to get, we have realized from the rate cut cycle. Going forward, that is where it is going to remain stable or maybe five to 10 bp s improvement. Hence, overall, there are upsides which are expected. It all depends on the current economic geopolitical situations. If that stabilizes, there is definitely a scope to do better. Otherwise, it should remain range bound.
Got it. Thank you so much, and congratulations. All the best.
Thank you.
Thank you.
Thank you. Next question comes from the line of Kunal Shah with Citigroup. Please go ahead. Mr. Shah, please go ahead. Mr. Shah, please unmute yourself and go ahead with your question.
Sorry. Yeah, thanks for taking the question. Firstly, on the.
We have lost the line of the participant. We'll promote the next. That is Gaurav Toshniwal. Please go ahead.
Hello?
Yeah.
Yeah. Hi, sir. This is Renish here from ICICI. Just two things. One on this business mix pickup in Q4. You did highlight it about the whole digital transformation helping us getting better volumes. When we are guiding for 18%-20% growth in retail assets, I'm sure the improvement which we saw in Q4 sort of has to sustain in 2027. Can you just briefly tell us, let us say, two, three major changes you might have done at ground level, which is helping us getting these volumes and which is sustainable going forward?
Yeah. Again, Sumit. Gaurav, correct? Gaurav Toshniwal.
Sir, Renish here from ICICI.
Renish?
Yeah.
Hi, Renish. Thank you so much. Rinesh, I think, largely, I would say the idea was to engage more on the field. We did some events which were related to our distribution and partners, in some top four, five cities of the country, wherein we invited even surrounding cities distribution also. The idea was to engage more with the partners who are doing housing finance business in the market. They might be doing lesser volume of business with us, but with the engagement, I think, the commitment was high, or they might not be doing also. Overall, what happened, it helped us to grow this volume by way of engaging the partners. Entire team was also fully engaged with visiting the branches, understand the challenges of the market, and getting them solved at very high pace. That was one thing.
I think that has helped really us very well, and we'll keep on focusing on that distributor engagement from April itself, I would say, going forward for the full year. Engagement will always be, and this is the success mantra of the retail business. You keep on engaging with the people, and you will keep on getting business from the market. I think that's the only new thing which has happened. Otherwise, the focus on to sort out the challenges which team was facing at the ground with the speed, I would say.
Got it. Basically what you're trying to say, sir, is that there is no big time changes we have done, but it is just that more engagement with the ground is sort of motivating them and helping us to get better volumes. I mean, is that the-
Yeah, because market is there, because we are, I think, third largest player in this industry. Housing finance industry is very large, growing by a pace of 12%-13%. There is an opportunity if you keep on engaging with the market and the people, I think business will definitely flow into your team.
Got it. Sir, just last clarification on the NIM side. You did mention about retail asset growth being at 18%-20%. Since we have also entered corporate business in Q4, and obviously we'll do some more in Q1 FY 2027, does that mean the overall book growth could be touching 20%?
Yeah. It will be in the range of 18%-20%. I think overall growth should come. While corporate finance composition will be 3% of my book, but the focus will remain on emerging and affordable.
Got it. It will still help us do better numbers on the blended basis.
Definitely. Because my market, emerging plus affordable would be higher than my prime business. That is how the overall helps improving my margin. Yeah.
Okay. Got it, sir. Thank you so much, and best of luck, sir.
Thank you, Renish.
Thank you. Next question comes from the line of Kunal Shah with Citigroup. Please go ahead.
Yeah. Thanks for taking the question. Sir, am I audible now?
Yeah, Kunal, you're audible.
Yeah. Firstly, with respect to the yields on the affordable housing side, that seems to be down almost 75 bps quarter-on-quarter when the disbursements have actually picked up. Was this maybe what Vinay was also indicating in terms of catching up with the lower incremental yields or there would be more repricing and maybe we will continue to operate at this level of yields in the affordable housing? That has come down to as low as 11.35%. Just wanted to check, is that the level which we'll operate in affordable housing?
Kunal, I think it's a combination of both, I would say. Largely what happened, in fact, while the overall yield is looking low, but if you see the NIM, we were able to maintain our NIM because we also got the benefit of cost. Okay. When the repo had gone down by almost 1.25% last year, the yield gone down in this business and so is true with the market. Okay. We were able to compensate by way of cost of funds, which has also given us benefits. Yes, there was intense, I would say, competition in terms of pricing, especially in the last quarter in the market. That is how you deal with that. I think, since we are able to maintain our NIM, it is not impacting much to us.
This is on affordable I'm talking about, sir.
Sure. Yeah. The question was also on affordable products. Yeah. When we look in terms of the recoveries which we anticipate getting into FY 2027, if you can quantify that, you indicated that will help the overall credit cost. How much is the recovery we are expecting?
You were talking about 27? I think, Vinay, even if you can give the number.
Yeah. For 27, Kunal, we are expecting around INR 200 crore-INR 250 crore recovery total.
In this year. Okay. Any particular reason for increase in 30+ in prime? It has gone up by almost 30 basis points to 3.31%.
No specific reason. If you see year-on-year, it is stable. It was 3.4% last year, and it is still 3.3%. The Q3 numbers were aberration actually.
No, even 30+, I think, has gone down from 3.4% to 2.72%.
30+. That is overall.
Overall, yeah.
Yeah. For prime, it has gone down.
Even prime has also gone down.
Yeah.
Sure.
It is in line. It's range-bound, Kunal. There is no specific movement. Q3 was an aberration, actually.
Sure.
It was on Q3.
Yeah.
Okay.
Overall, I think for the full year basis it has improved. Yeah.
Oh. Got it. Thank you.
Thank you. Next question comes from the line of Prithviraj Patil with Investec. Please go ahead.
Yes, I have a couple of questions. The first question is on the NIM. In the opening questions, we mentioned that the NIM would converge with the spread. The ROA that looks higher this quarter, it's largely because of accounting, then that will sort of move lower next quarter, or how do we look at the NIM going forward? The second question is on the SR sale that's mentioned in one of the footnotes in our financial statement. What is the fair value gain that we've booked on sale of these SRs?
See, actually, on the SR bit, this is one account which we have fully realized. This is like it's not a fair value gain, it is a cash receipt that has happened, and hence SR is closed fully. That is the recovery which has come. That is on the profit side. On the NIM, as I mentioned, it is more of aberration or the accounting which has led to this change. It will normalize next quarter. At the same time, next quarter, as I mentioned, we should see some benefits on the overall yield trajectory, and hence we should be able to maintain the current NIM trajectory that we have with a gap of between five to 10 basis .
Okay. Thank you.
Mr. Patil, are you done with the question?
Yes. Thank you.
Thank you. Next question comes from the line of Avinash Singh with Emkay Global Financial Services Limited. Please go ahead.
Hi. Good morning. Thanks for the opportunity. A couple of questions. The first one, when you are guiding kind of a 2.4%-2.5% ROA for next year, what kind of a credit cost is being built into this assumption? My question is basically that, okay, if I were to look at, say, last year's ROA 2.66%. Of course, that has a kind of a 35 basis point negative credit cost. If we were to build a normalized case of possibly the ROAs are more into a 2%. For a full year, I mean. For the last quarter, we come closer to maybe 2.1 odd%.
If we were kind of looking in a normalized case, 30-40 basis points improvement in ROA, that heavy lifting has to be done by yields and maybe some bit on the cost of funds if we were to see a rating upgrade. In this context, just wanted, because OpEx is their optimal level already. Just if you can help us with what kind of a credit cost assumption there is to 2.4%-2.5% kind of ROA. If, going forward beyond FY 2027, when recoveries kind of nearly goes away and you swing to more like a 20-30 basis points, whatever the ideal credit cost you would build. I mean, how are you going to sort of deliver 2.4%-2.5% ROA? That's one.
Second one on the product front, are there some products, I mean, now you are there into the affordable emerging as well as the developer side of these loans. Are there some product offering yet to be launched or you see, particularly in the non-housing side, will you be looking for kind of to go into, say, a micro-LAP in a category, say, eight, 10, 12x or something in near future? Thanks.
I will answer the second question first, then Vinay will take over. As far as this product development is concerned, we are already in the segment of emerging and affordable. Yes, you are right. We are looking at the segment of which is between 14%-16% segment, which we are going to start operation in the branches where my affordable business is already present. It would be not only micro-LAP, it would be micro housing also. The range would be around 14%-16% range. That introduction will happen in Q1 itself. On the financial aspect, Vinay, you can.
Yeah. On the overall ROA trajectory, as you mentioned, so the guidance is around 2.4%-2.5%. Even for next year, we expect the benefits on the recoveries from the return of pool to continue. We still expect the credit cost to remain negative next year in the range of around 15-20 bps. This is what is factored in. Overall improvement and ensuring that it remains sustainable, so as you also rightly mentioned in your query itself, that it has to be picked up through the higher mix of emerging, affordable, and corporate. This is where we are working on. Currently we are at 40%. We expect in the next two to three years this mix to move towards 50+ and with higher mix of corporate as well.
The benefit is going to come on the NIM over a period of next two to three years to cover up the gap which we have on the credit cost and should ensure that we maintain the similar trajectory on a longer run.
Okay. Thanks.
Thank you. Next question comes from the line of Gaurav Khandelwal with JP Morgan. Please go ahead.
Yeah. Hi, good morning. Thanks for taking my questions. I've got a couple, I'll ask those one by one. First, if I can just understand that our focus is to grow affordable, but if I look at the disbursements on affordable side, it was quite weak in FY 2026 Q4. In fact, affordable disbursements came down 93%. Vis-à-vis prime which is not our key focus area, but we still see high disbursements. Is this something to do with the ongoing rates in the market or is this more to do with asset quality?
Gaurav, affordable has started shaping up now. In last quarter, we disbursed almost similar what we disbursed last year. As far as prime business, basically a prime business is nothing but the replenishment of what book you lost during the year. If you see my growth on prime business is only 9%, while affordable growth is very high. The focus will continue on because you want to grow overall book also. Whatever book you lose in the prime segment during the year, you replenish that. That is why the growth looks high in the affordable in terms of disbursement, but actual the growth is not very high. Focus will remain on affordable business. It is not related or any significant relevance with the quality because quality you see in affordable is good. We are now below 0.6% in our GNPA. Our bouncing is under control.
Our 30+ is under control now. In all the parameters of quality in affordable, we are under control.
Got it. In that case, sir, is it fair to say that because the incremental yields have been so low and -75 bps QoQ, that was one of the key reasons of disbursing affordable at a slower pace?
No, I think disbursement was not in slow pace. I would say that there were some challenges which we faced during mid of the year, which we corrected, and that is why deliberately we wanted to check those markets first, and then we wanted to grow. Now we have checked those markets and we found that those issues were temporary issues which you overcome now. The yield dip is not because of, as I said in my earlier conversation also, yield dip was because of drop in the repo rate. Okay? That is how now, going forward, when we are entering into segment of micro housing and micro-LAP, we will overcome with that, and we'll try to improve overall yield of affordable business.
Got it. Okay. Thanks for that. My other question is, sorry, can I just take one quick one?
We missed your voice, Gaurav. Can you come to me?
Yeah. My other question is, can you share some early indicators of how the bounce rates are shaping up in the first half of April?
First half of?
April.
April. I think the bounce in April is more or less similar to what it was in March. There is no significant jump in the bounce this year. There was one set of customers which we identified by way of doing some data science analysis that, some customer of government's employee segment got impacted by their bounce, and that got even paid very next day. When we deep dived into that, we found that because March is generally a month of taxation, because people have to clear their taxes within March itself. Might be their planning was not as per their requirement, and that is why there could be some shortfall in their banking. But very next day or next to next day, most of them paid. That was the only one indicator which came, and since they paid very next day.
I think other than that, there's nothing which we found significant change in the bouncing.
Got it. Effectively, no early signs of asset quality stress due to the ongoing geopolitical issues.
I don't think so as of now.
Got it. All right. Those were all my questions. Thank you very much.
Yeah.
Thank you. A reminder to all the participants, please restrict yourself to two questions. Next question comes from the line of Nischint Chawathe with Kotak. Please go ahead.
Yeah. Thanks for taking my questions. One was on the yield side, when you mentioned that we expect that yields have bottomed out and will go up from here on. What gives you that confidence? Given the fact that your incremental yields are going down. I understand the book composition, but apart from that.
I think, Nischint, why I'm saying that it seems to be bottomed out, because one is that there's no change in repo rate in last few months. Because whenever there's change in repo rate, the tendency of people is to do the BT out from your portfolio. Rather, I would say, I think there is some upside in the market in the rate of interest. The chances of drop in the rate doesn't seems to be there. That is why the BT out will be restricted. When BT out will be restricted, your overall yield will maintain. That's how I think.
Sure. Any color you could give as to how the BT out ratios have trended over the last four quarters?
I think overall, if I talk about BT out of my entire portfolio is almost, I would say, for the full year I'm talking about, is 8%, and the quarter four was 8.6%. So on annualized it is 8.1%, on quarter four it is 8.6%. So it's hardly a 0.5% difference between quarter four and overall.
Just to add, Nischint, Q4 has actually improved from Q3
Yeah.
Q3 was eight.
8.95. It means we have acquired more new customers than balance transfer.
I think, basically you're saying that balance transfer trends are on an improvement.
Yeah
which kind of gives you this confidence.
From Q3, Q4 has improved.
Sure. I just missed your guidance on the overall loan growth. I think you mentioned something like INR 1 lakh crore plus, but what exactly are you really looking at?
18%-20% growth, as I said in my earlier conversation there, we are looking at 18%-20% growth in loan book.
Got it. Thank you very much.
Thank you.
Thank you. Next question comes from the line of Hardik Shah with KMP Securities. Please go ahead. Mr. Shah, please go ahead with your question. Next question comes from the line of Nidesh Jain with Investec. Please go ahead.
Thanks for the opportunity. My question is on the loan growth and loan mix. If you look at this quarter, there is a sharp increase in non-individual home loans, and I think it grew some 12% QoQ as per our calculation, while housing loan growth was still soft at 3% QoQ. What is happening here, and what is our strategy in terms of loan mix going forward?
Loan mix, I think while value could be more in non-home loan in quarter, but overall, the non-housing versus housing would be around the range of 38%-40%. Overall at, I would say vertical level, it will be in the range of say non-housing versus housing will remain that. In Q4, our non-housing loan grew from Q3, I would say 32.4% from 30.6%. While there is an increase, but increase is not very large, I would say. It is 102% growth which is witnessed. On overall basis, yearly basis, I would say that we grew by almost 3.5%. To keep in mind that we have to improve our NIM also. Keeping under consideration the regulatory norms are also met. That is how we are focusing on it because we have the scope to do more non-housing loan.
We are also keeping our watch on that there should not be any breach on regulation, which will help us in longer term to improve our margin.
From PSL criteria, what is the share of retained home loans? At what percentage we are operating at right now?
Yeah, Vinay.
We are at 65%, Nidesh.
Okay. There's significant room to.
Yeah.
Reduce it. The last question is on corporate loans. How do you see growth and share of corporate loans, let's say, 12 months down the line and to 24 months down the line in overall loan mix?
This year, I think we will be having, as I said, that we'll be having almost 3% of our book would be corporate loan book. We'll be very moderate on that. We will not be focusing very high on corporate book because we want to go into this business in very calibrated way and sustainable way, I would say. If I talk about first year, it would be around 3%, second year would be around 5%-6% of my overall book. Maybe down the line three year it would be in the range of 8%-9% of my overall book, which will be my corporate book.
What is the incremental yield on corporate book?
It would-
11.5-12.
It would be in the range of 11.5%-12% almost.
Sure. Thank you, sir. That's it from my side.
Yeah.
Thank you. Ladies and gentlemen, due to time constraints, we have reached the end of question and answer session. I now hand the conference over to Chaitanya Yadav for closing comments.
Thank you everyone for joining us on the call. If you have any questions unanswered, please feel free to get in touch with Investor Relations. The transcript of this call will be uploaded on our website that is www.pnbhousing.com. Thank you, everyone.
Thank you. On behalf of PNB Housing Finance Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.