National Housing Finance Corporation SOC Limited

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National Housing Finance Corporation SOC Limited (2022-04)
  • National Housing Finance Corporation SOC Limited
  • Year : Apr 2022
3 Tokens
USD 300.00

NHFC’s primary funding source has been the government (100% ownership) with minimal levels of external debt in its capital structure. This, coupled with moderate loan growth, has underpinned very strong capitalisation (GCR leverage ratio more than 50%), providing ample loss absorption capacity for unexpected loan book pressure and deterioration of strategic investments. Earnings, while declining (due to lower interest rates and lack of scale), remain net positive, supporting adequate capital growth. The rising interest rate cycle, coupled with stronger disbursement expectations could slightly uplift earnings, although weaker asset quality and short-term operating cost pressures (due to increasing staff contingent and ICT related costs) could limit upside

Additional Information

Very strong capital and liquidity, along with potential for ratings support for a government-owned entity (up to the operating environment assessment anchor score), should support the ratings and stable outlook over the ratings horizon, catering for any unexpected asset quality pressure or prolonged operational challenges. The national scale ratings could be upgraded over the medium-term upon a sustained improvement in earnings and more settled operational structure, while maintaining exceptional capital and liquidity.

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