Asset quality of India's housing lenders likely to worsen: ICRA

Indian housing finance companies (HFCs) are likely to face worsening of asset quality this year, with about 30 percent of their portfolios falling within the regulator-approved moratorium as of end-May, rating agency ICRA said on Friday.

ICRA said gross non-performing assets (GNPA) in the housing segment could increase 2.5-3 percent in the fiscal year through March 2021 from an estimated 1.7 percent, as of March this year. In the non-housing segment, the GNPA could be higher at 3-4.5 percent by the end of fiscal year 2021 from 2.5 percent at the end of this fiscal year, the rating agency said.

"While home loans are expected to show higher resilience on the asset quality front vis-à-vis other asset classes owing to their secured nature and majority also being self-occupied, the loss of income for borrowers could lead to an increase in the GNPA in the housing loan segment as well," Supreeta Nijjar, Vice-President, Financial Sector Ratings at ICRA said.