Mumbai: With PNB Housing Finance Ltd (PNBHFL) having completed 25 years since its inception on 11 November 1988, the Company is leveraging the milestone as a stepping stone to a more glorious tomorrow.

PNB Housing Finance Limited (PNBHFL) is a subsidiary of Punjab National Bank (PNB), which holds 51% of share capital in the Company. Recognizing the burgeoning needs of a dynamic housing finance sector in the emerging middle class of the country, PNB entered into a strategic alliance with a private equity partner in 2009, which now holds 49% of the share capital.

With an objective to transform PNBHFL into a premier housing finance company, a very detailed business transformation and re-engineering project was undertaken with KPMG Advisors as the consultant in July 2010.

The Company has travelled this transition journey in a smooth manner, which is reflected in its business and profit growth. In the last four years, PNBHFL has emerged as a strong Housing Finance company (HFC) and has achieved several milestones.

Recently, the Company entered the elite club of select lenders with loan asset book of more than INR 10,000 Crore and estimated profit after tax for FY 2013-14 of over INR 120 Crore.

Elaborating on the Company’s vision, Mr K R Kamath, CMD, Punjab National Bank and Chairman PNBHFL, asserted: “PNB HFL is poised for higher than industry growth rate in the coming years. In the HFCs domain, we want to see PNBHFL growing into a robust, compliant, transparent and best in customer service Company. The most admired HFC !

Recognizing the growth potential, PNB is committed to lend full support to its subsidiary. EARLY IN FY  2013-14 The Board of Directors of PNB HFL had estimated equity capital infusion of INR 1000 crore over the next 3 years. PNB has taken all statutory approvals to infuse its share of capital of INR 510 crore, out of which PNB has already subscribed INR 204 crores in the current financial year. Remaining capital of INR 490 crore will be contributed by the strategic partner. With infusion of fresh capital and robust systems and processes, the Company has built capabilities to double or triple its business in the next few years.

The Company’s Board of Directors are keenly engaged with variety of new initiatives that the Company is engaged in and from time to time sub-committees of the Board relentlessly work with the executive team to build a robust and sustainable growth path.

Commenting on the milestone, Mr. Sanjaya Gupta, MD, PNBHFL, remarked: “We are not only commemorating 25 years in business, but also celebrating complete internal transformation that we have embarked up on from 2011. Especially in the past two years, in terms of augmenting its internal systems, building robust processes, creating a contemporary operating model, delivering personalized doorstep services, offering mark-to-market products and a wider network for easy accessibility as well as better branch infrastructure and service standards. The Company is in a high investment mode to create new infrastructure facilities and technology platform to compete as a best in class Housing Finance Company.

A key component of PNBHFL transformation journey is in its human resource capital – the strategy has been to develop a performance based reward and recognition culture with matrix alignment, but ensuring functional independence.  Thereby leveraging cross functional synergy and expertise. Hence its change management has been recognized and awarded ‘The Best Change Management Intervention’ by Learning and Organization Development, South Asian Forum.

PNBHFL works closely with customers to find pragmatic solutions that suit their preferences. These efforts reflect in the Company’s core business values that revolve around the motto, ‘Ghar ki Baat’.”

In last 4 years, PNB HFL’s loan sanctions have grown from INR 850 to INR 8000 crore, loans disbursements have grown from INR 800 crore to INR 5200 crore and loans outstanding from INR 2500 crore to INR 10200 crore (estimated for FY 2013-14).

Despite high growth rate over the years, the Company has continued to maintain one of the lowest NPAs in the industry (gross NPAs at 0.50% and net NPAs at 0.35% estimated for March 2014).

The credit rating agencies, CRISIL, CARE and ICRA have up-graded the rating of various debt instruments of the Company. Deposits are rated FAAA by CRISIL, NCDs have been rated FAA+ (stable) by CRISIL, CARE and ICRA.