Can Fin Homes is on the radar on the back of its Q1 earnings. The net interest margin (NIM) has seen a sharp decline this time around but asset quality remained resilient for the company.

Explaining the reason for the decline in NIMs, Girish Kousgi, MD & CEO of Can Fin Homes, spoke to CNBC-TV18. He said that for the last few quarters, because of competition from large banks, both PSUs and private banks as well as HFCs, they had to be competitive in the market to grow the book and therefore changed the pricing strategy. However, that is now coming to an end, going forward, both NIMs and spread would inch up because the company has already repriced 70 percent of the book; and from this quarter onwards, the company will see good growth in disbursement numbers, he added.

On the borrowing profile, he said, “We have not changed the profile mix per se, but by design due to COVID, there is more demand from salaried customers. At a portfolio level and incremental level, about a year back salaried was 71 percent and S&P was 29 percent but post Covid, there was a shift towards salaried, which now stands at 82 percent. So, this change in profile mix was more by design and not by desire but by next few quarters, this would again change and we would be back to 70 and 30.”

He further specified that earlier the focus was on affordable housing loans in the salaried segment but now the focus is on both affordable and slightly higher ticket loans which is safer.

On asset quality, he said, “if there is a third wave of COVID and if it lasts for long and is severe in nature, only then there could be pressure on asset quality and that would be for the entire industry, not just Can Fin, otherwise expect demand to be robust and see no impact asset quality.”

Kousgi further added that he expects growth to come back strongly from Q2 in the absence of a third COVID wave.

He said that the company will be able to improve yields and margin, going ahead.

For the entire interview, watch the accompanying video

(Edited by : Dipika Ghosh)