**Title:** PNB Housing Finance Shifts Focus to Profitability Amid Competition
**Meta Description:** PNB Housing Finance is recalibrating its strategy to enhance profitability and loan growth in affordable and emerging markets amid rising competition.
**URL Slug:** pnb-housing-finance-profitability-strategy
**Headline:** PNB Housing Finance Reassesses Strategy to Boost Profitability and Loan Growth
In response to increasing competition and margin pressures, PNB Housing Finance is recalibrating its strategy to enhance profitability and drive loan growth in key segments. The lender, which has faced challenges with slower growth and high non-performing assets (NPAs) in its commercial loan portfolio, is now prioritizing profitability and margin maximization.
Based in Mumbai, PNB Housing Finance is shifting its focus towards high-yielding affordable and emerging markets to counter the competitive landscape, particularly from banks offering lower rates in prime and super-prime categories. This strategic pivot is also influenced by traditional housing finance companies like LIC Housing Finance, which are targeting middle-to-lower-income customers.
To achieve its profitability goals, PNB Housing Finance is expanding its retail housing portfolio by increasing loans in affordable and emerging markets, opening new branches to cater to these segments, and diversifying into commercial loans and a newly launched loan against property (LAP) vertical. The company aims to grow its retail loan book from ₹75,000 crore to ₹1 trillion by FY27, with the affordable housing segment (branded as Roshni) projected to contribute ₹15,000 crore, or 15% of the total portfolio. The emerging segment is expected to reach around ₹25,000 crore, while the prime segment will account for the remaining ₹60,000 crore.
As of March 31, 2025, PNB Housing’s assets under management (AUM) were ₹80,397 crore, with loan assets comprising ₹75,765 crore, and retail loans making up 99% of all loan assets.
**Affordable and Emerging Segments**
Girish Kousgi, the managing director and CEO, expressed ambitious plans for both the emerging and affordable segments, noting that while demand has been robust across all areas, growth has been particularly strong in affordable and emerging segments during FY25. This growth is attributed to the smaller size of these books and the margin pressures faced in the prime segment. The emerging segment, launched in FY25, experienced a growth rate of approximately 21%, while the affordable loan segment surged by 183% to ₹5,070 crore, with aspirations to expand to ₹9,500 crore by the end of the current financial year.
Kousgi emphasized that the focus is shifting away from prime loans due to profitability concerns, with more attention directed towards emerging and affordable segments. Currently, these two segments account for 40% of incremental disbursements and represent 23% of the total loan portfolio, with plans to increase this share to 40% by FY27. These segments are particularly attractive as they primarily serve middle-to-lower-income customers.
In conclusion, PNB Housing Finance is strategically repositioning itself to navigate the competitive landscape by focusing on profitability and expanding its presence in affordable and emerging markets, setting the stage for sustainable growth in the coming years.
**FAQ**
**What is PNB Housing Finance’s strategy for growth?**
PNB Housing Finance is focusing on enhancing profitability by expanding its retail housing portfolio in affordable and emerging markets while reducing emphasis on prime loans due to margin pressures.
