Indian mortgage lender PNB Housing Finance on Monday posted a nearly 48% rise in its first-quarter profit, driven by robust demand for housing loans and improved asset quality.

PNB Housing, a unit of state-run lender Punjab National Bank , said its consolidated net profit after tax stood at 3.47 billion rupees ($42.4 million) for the quarter ended June 30, compared with 2.35 billion rupees a year earlier.

Net interest margin, a key measure of profitability, stood at 3.86%, while net interest income amplified by 70% to 6.29 billion rupees during the quarter.

Demand for housing in India has continued to rise post-pandemic as a rising middle class looks to invest in real estate even amid higher loan interest rates.

The Reserve Bank of India has raised key interest rates by 250 basis points since May 2022, pausing hikes in April and June.

New Delhi-based PNB Housing Finance said asset quality improved in the quarter, with gross non-performing assets as a percentage of total loans slipping to 3.76% as on June 30, from 3.83% as on March 31.

Disbursements for the quarter climbed 7% year-on-year to 36.86 billion rupees.

Shares of the lender rose 3.8% to 675 rupees after the results.


($1 = 81.8750 Indian rupees) (Reporting by Kashish Tandon in Bengaluru; Editing by Nivedita Bhattacharjee)