BENGALURU (Reuters) – India’s LIC Housing Finance Ltd reported a 37% decline in third-quarter profit on Monday, hit by higher financing costs and as impairment charges more than doubled.
The company, a unit of Life Insurance Corp of India, said net profit fell to 4.80 billion rupees ($58 million) in the quarter ended Dec. 31, from 7.67 billion rupees a year earlier.
The Mumbai-based lender said its impairment costs on financial instruments surged 114.5% to 7.63 billion rupees.
However, the bigger dampener on results was from finance costs that surged 19.4%, accounting for 80% of total expenses, which increased 28.6% to 52.83 billion rupees.
Housing demand has remained strong in India, despite a flurry of interest rate hikes last year, as a burgeoning rising middle class buys real estate. But higher funding costs have compressed net interest margins and net interest income.
LIC Housing’s interest income rose 16.8% to 58.39 billion rupees in the quarter.
The company’s shares closed down 2.9% ahead of the results on Monday. They have fallen just over 6% so far this year, less than half the roughly 12% drop in LIC’s shares. ($1 = 82.7440 Indian rupees)
(This story has been corrected to change impairment charge to 7.63 billion rupees from 76.3 billion rupees in paragraph 3)
(Reporting by Biplob Kumar Das in Bengaluru; Editing by Savio D’Souza)