Tag: care ratings

CARE Ratings standalone profit drops 4% at ₹15.81 crore in December quarter

Banking & Finance

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CARE Ratings reported a 4 per cent decline in standalone net profit at ₹15.81 crore in the third quarter ended December 31, against Rs 16.47 crore in the year ago quarter.

The Board of Directors of the credit rating agency declared an interim dividend of ₹3 per share having a nominal value of ₹10 each.

Revenue from operations in the reporting quarter was at ₹46.50 crore, declined about 7 per cent year-on-year (yoy). Other income at ₹8.32 crore was up about 12 per cent yoy.

Employee benefit expenses were at ₹26.06 crore, rose about 12 per cent yoy. Other expenses at ₹5.79 crore were down about 46 per cent yoy.

CARE Ratings reported an 8 per cent yoy increase in consolidated net profit at ₹18.93 crore in the reporting quarter against ₹17.57 crore in the year ago period.

The consolidated financial results include results of CARE Ratings and its subsidiaries — CARE Risk Solutions, CARE Advisory Research and Training, CARE Ratings (Africa)and CARE Ratings Nepal.

“The Company has assessed the impact of COVID-19 pandemic on its financial results based on the internal and external information up to the date of approval of these financial results and the Company expects to recover the carrying amounts of its investments, intangible assets, trade receivables & other assets. The Company will continue to closely monitor the future economic conditions and assess its impact on its financial results,” according to the notes to accounts.

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After banks, regulators to appeal against NCLT order, BFSI News, ET BFSI

Banking & Finance

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After banks, regulators, including the RBI, are set to appeal against an order of the National Company Law Tribunal’s (NCLT’s) Kolkata bench, which had allowed a moratorium on debt repayment by Srei Equipment Finance (SEFL). Some lenders have already moved the National Company Law Appellate Tribunal (NCLAT) to stay the order and appeal against it.

Banking sources told TOI that the RBI too will file a petition in the coming days as the NCLT had stopped all government or regulatory authorities from taking any coercive steps against the non-bank finance company, “including reporting in any form and/or changing the account status of the company from being a standard asset”.

“Credit rating agencies shall not consider any nonpayment to be a default and shall maintain the rating of SEFL at least that of investment grade,” an order issued late last month said.

The NCLT has asked the company to convene meetings of debenture holders, ECB lenders and perpetual debt instrument holders between May and July to work out a new scheme of arrangement. Earlier this month, CARE Ratings said it would continue to closely monitor the developments and is also seeking legal assistance.

SEFL had argued that the RBI allowed moratorium and loan restructuring for NBFC borrowers but finance companies were not given a moratorium. This along with the economic downturn in the wake of Covid-19, has led to an asset-liability mismatch, it argued.



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CARE report, BFSI News, ET BFSI

Banking & Finance

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The rise in retail loans and a slight uptick in corporate borrowings pushed up the bank credit growth marginally during the fortnight ending December 18, though the deposit growth remained flat, CARE Ratings said in a report.

However, as compared to the year-ago period, the credit growth remained low, reflecting subdued demand and risk aversion in the banking system — especially towards the corporate segment. The credit growth on a year-to-year basis worked out to be 7.1 per cent.

The bank credit growth during the reporting fortnight ending December 18, 2020, is being supported by disbursements under the Emergency Credit Line Guarantee Scheme (ECLGS), which has been extended further till March 31, 2020, as per the CARE report.

“The bank credit growth increased marginally compared to last fortnight which can be ascribed to an increase in retail loans along with a marginal uptick in corporate loans,” the report said.

Deposit growth remained flat at 11.3 per cent (as of December 18, 2020) compared to the previous fortnight and increased on a year-on-year basis (10.1 per cent as of December 20, 2019), it added.

“Whereas, in value terms, the bank deposits have declined compared with previous fortnight (decreased by around Rs 1 lakh crore). This similar trend has been observed in the last few years wherein deposits (value) declined during the last fortnight of December,” the report said.

Moreover, as on December 18, 2020, the liquidity surplus in the banking system stood at Rs 4.6 lakh crore. The liquidity surplus can be ascribed to deposit growth outpacing credit growth persistently, CARE Ratings said.

The report further said the credit to deposit (CD) ratio increased marginally over the preceding fortnight but remained low against March 2020 and last year’s level, owing to slower growth in credit.



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