GIC CEO and MD Neera Saxena: Interest rate hike one of the major reasons for the slump in profit

The GIC Housing Finance has announced its fourth quarter results for the fiscal 2018-19 and its profit has gone down from Rs 66 crore to Rs 51 crore. The GIC CEO and MD Neera Saxena has said that interest rate hike by various banks operating in India is one of the major reasons for this slump in profit of the housing finance company. They also said that IL&FS crisis also damaged their business as they have now started to disburse loans to the salaried class more than the business class.

Speaking on the matter Neera Saxena, CEO and MD at GIC Housing Finance told Zee Business TV, "Our profit has gone down due to the rise in our average borrowing that surged from 7.82 per cent to 8 per cent." She said that this happened because their lending banks have hiked their interest rates and they are helpless in that regard. 

Please see the Zee Business video below:

क्या है #GICHousing के मुनाफे में कमी की वजह.. देखिए कंपनी की MD&CEO नीरा सक्सेना से अनुराग शाह के साथ खास बातचीत।@anuragshah710 pic.twitter.com/WLS2b4ofvH

— Zee Business (@ZeeBusiness) May 28, 2019

However, she said that there is no liquidity crisis in the GIC Housing Finance Company if compared with other Non-Banking Financial Companies (NBFCs) citing, "We are a government-backed organisation and hence there is no such liquidity crisis that our rival NBFCs are facing."

On the IL&FS crisis hitting the NBFC business, Saxena said, "IL&FS crisis has a bearing on the NBFC business but we have changed our strategy of loan disbursal. We have now increased focus on the salaried class and our loan disbursal to the salaried section has gone up from 62 per cent to 77 per cent while in the same for business class has come down from 33 per cent to 23 per cent." She said that IL&FS crisis has affected GIC Housing Finance business as their loan disbursal got affected.