Don't expect costs rising going forward, says Repco Home Finance

Shares of Repco Home Finance gained 10 percent on Tuesday and has advanced 25 percent in the last four trading sessions. Yashpal Gupta, MD and CEO of Repco Home Finance, spoke to CNBC-TV18 about the company's growth prospects.

“Loan growth had always been good, the problem was always with the pre-payment. With some of the players getting slow at the market – pre-payment rates have reduced, it used to be about 21-22 percent (total repayment and prepayment). In Q3 it was reduced to about 17-18 percent and that has resulted in higher growth and we expect that will continue to be maintained going forward because our book is a retail book – it is not a construction book at all. So we are immune to those problems. We expect growth to continue,” Gupta said on Tuesday.

“Going forward, we do not see costs going up. It will remain stable but even if it goes up, we do have a robust mechanism to pass on any increase or decrease,” he added.

Talking about the net interest margins (NIMs), Gupta said, “We are maintaining about 3 percent plus-minus 5-10 bps here and there for the last few quarters and we are supposed to maintain it at that level. NIM is a function of the spread and the leverage. So taking that into account, it will remain around 4.25-4.5 range.”