Tag: net profit

Credit Access Grameen reports 8% drop YoY in Q2 net profit

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Credit Access Grameen Ltd (CAGL) has reported a 8 per cent year-on-year (YoY) drop in its second quarter standalone net profit at ₹72 crore against ₹78.2 crore in the year ago quarter.

Provisions hit bottomline

The Bengaluru-headquartered microfinance institution’s bottomline was weighed down by a 39.5 per cent YoY increase in loan loss provisions at ₹91.1 crore against ₹65.3 crore in the year-ago period.

Pre-provisioning operating profit, however, was up 10.6 per cent YoY to ₹188.2 crore from ₹170.1 crore a year ago.

Also see: How to make public debt sustainable

Loan disbursements jumped to ₹3,412 crore against ₹907 crore in the preceding quarter and ₹1,420 crore in the corresponding quarter of the previous fiscal.

Gross loan portflio (GLP) increased 21.5 per cent YoY to ₹11,184 crore as at September-end 2021.

NPAs decline

Gross non-performing assets (GNPAs) declined to 7.18 per cent of gross advances by September-end 2021 against 8.12 per cent in the previous quarter. However, they were higher than Q2FY21’s 5.18 per cent.

Restructured loans

CAGL restructured loans aggregating ₹99.1 crore in the reporting quarter against ₹6.9 crore in the preceding quarter. Overall, the MFI has restructured loans aggregating ₹183.1 crore (incluing restructuring in FY21).

Total provisioning on restructured loans, which account for 1.5 per cent of GLP as on September-end 2021, is 28.8 per cent.

Net interest margin improved a shade to 11.3 per cent from 11.2 per cent a year ago.

CAGL’s consolidated net profit, including the results of three subsidiaries — Madura Micro Finance, Madura Micro Education and CreditAccess India Foundation — declined 25 per cent YoY to ₹59.7 crore against ₹79.6 crore.

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Muthoot Finance sees net profit grow 11% to ₹994 crore in Q2

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Gold loan lender Muthoot Finance has posted 11 per cent growth in its net profit to ₹994 crore in Q2FY22 against ₹894 crore in Q2FY21.

Consolidated profit was ₹1,002 crore compared to ₹979 crore in the corresponding period of the previous fiscal. Loan assets stood at ₹55,147 crore compared to ₹47,016 crore last year, a growth of 17 per cent. Over the quarter, gold loan assets increased by ₹2,613 crore, a rise of 5 per cent.

Also see: Muthoot Fincorp organises Small Shop Days in Kochi

George Jacob Muthoot, Chair, Muthoot Finance, said, “As the second wave of the pandemic ebbs and the economy further unlocks, corporate India has emerged stronger and better. We were able to maintain growth momentum during the quarter with all of our branches now open for business. Our consolidated AUM stood at ₹60,919 crore as of end September 2021, clocking a growth of five per cent QoQ and a growth of 17 per cent YoY despite a challenging business environment. The contribution of our subsidiaries to the overall consolidated AUM stands steady at 10 per cent.”

Growth in gold loans

George Alexander Muthoot, Managing Director, Muthoot Finance, said, “The demand environment remains strong and as we enter the festive season, we remain optimistic about growth momentum in gold loan over the second half of FY22. We are optimistic about growing our gold loan book further and maintain 15 per cent growth guidance for FY22.

Also see: Why gold loans continue to glitter in these trying times

“We are witnessing improved collections across microfinance, vehicle finance and home loans. In the last quarter, we had consciously decided to go slow on non-gold lending business. We continue to remain conscious and monitor the space for emerging opportunities. We will continue to follow the strategy of balanced growth while maintaining overall asset quality,” he added.

Subsidiary contributions

Muthoot Homefin (India) has posted a PAT of ₹0.23 crore in Q2 and total revenue of ₹46 crore. Belstar Microfinance achieved a PAT of ₹2 crore and total revenue for Q2 stood at ₹150 crore. Muthoot Insurance Brokers achieved a PAT of ₹5 crore. Asia Asset Finance achieved a PAT of LKR 2 crore (around ₹0.73 crore). Muthoot Money achieved a PAT of ₹0.92 crore.

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Bank of India standalone net profit almost doubles to ₹1,051 cr in Q2

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Bank of India’s standalone net profit almost doubled to ₹1,051 crore in the second quarter against ₹526 crore in the year ago period on the back of robust growth in other income and a steep decline in loan loss provisions.

During the reporting quarter, there was a reduction in gross non-performing assets (GNPAs) aggregating ₹5,771.50 crore.

NPA position of Indian Banks indicates gradual improvement: CARE Ratings

The Mumbai-headquartered public sector bank’s net interest income (difference between interest earned and interest expended) declined 14 per cent year-on-year (yoy) to ₹3,523 crore (₹4,113 crore in the year ago quarter).

Other income, including profit/loss on sale of assets, profit/loss on revaluation of investments (net), earnings from foreign exchange and derivative transactions, recoveries from accounts previously written off, dividend income, etc., jumped 59 per cent yoy to ₹2,136 crore (₹1,346 crore).

To ease lending, FinMin moves to boost bankers’ morale, growth

GNPA position improved to 12 per cent of gross advances as at September-end 2021 against 13.51 per cent in the preceding quarter.

NPA position

Net NPAs position too improved to 2.79 per cent of net advances against 3.35 per cent in the preceding quarter.

Total deposits edged up by about one per cent yoy to ₹6,12,961 crore. Total advances were up about 5 per cent yoy to ₹3,78,727 crore.

On a consolidated basis, including the results of four domestic subsidiaries, four overseas subsidiaries, one joint venture and six associates, BoI reported a 97 per cent jump in net profit at ₹1,073 crore (₹543 crore).

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Banks face pressure on NIM as they lower rates to outsmart rivals, BFSI News, ET BFSI

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An intense price war in retail loans ahead of the festive season has led to a pronounced fall in interest income for banks, putting pressure on their key profitability parameter: Net interest margins (NIM).

Five of the seven state-owned banks that have announced their quarterly earnings so far have reported lower NIM for the September quarter. These banks, however, managed to report a rise in net profit largely on account of bad loan recovery and write-back of provision made in earlier quarters.

Captains in the banking industry said that they would rely on credit growth to boost NIM in the next two quarters since lending rates would likely remain soft until the monetary policy authority continues its accommodative stance to support economic recovery.

The banking sector’s weighted average lending rates dropped 31 basis points in September to 7.20%, the biggest monthly fall since November 2016. Public-sector banks led the race in slashing loan costs. Lending rates were already low as banks followed regulatory signal on softer interest rate regime over the past two years.

Room for further deposit rate cuts is not available for lenders as real interest rate is already negative, keeping the NIM sticky below 3% for most of them.

Punjab National Bank reported the steepest 25% drop in net interest income among state-owned lenders that have announced their quarterly earnings so far. Canara Bank and Indian Bank have lower NII and NIM for the quarter under review.

The market became too competitive with all large banks lowering interest rates, leading to a fall in NIM, said Indian Overseas Bank chief executive Partha Pratim Sengupta last week. IOB, however, clocked 4.6% higher net interest income even as its NIM fell to 2.51% for the quarter ending September 30 from 2.57% in the year-ago period.

Punjab & Sind Bank has had a marginal rise in NII while its NIM dropped. Bank of Maharashtra and Uco Bank, on the other hand, reported a rise in both NII and NIM.

Indian Bank chief executive Shanti Lal Jain expects interest income to rise in the next two quarters with higher credit off-take, in line with expected economic recovery. Uco Bank’s AK Goel shared a similar view.

Public sector banks, however, would likely face a challenge in terms of credit growth from their private sector peers, which are typically more aggressive in retail lending.

Over the last five years, public sector banks’ market share has dropped by around 10% in both deposits and advances. “Clearly, asset quality and the resultant profitability, as well as capital challenges, have been the key factor in the slowdown of the public sector banks,” Acuite Ratings & Research said in a note.



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Aditya Birla Capital reports 43% jump in Q2 net profit

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Aditya Birla Capital reported a 42.6 per cent surge in its consolidated net profit to ₹376.9 crore in the second quarter of the fiscal, led by robust growth in revenue. Its net profit was ₹264.34 crore in the corresponding quarter of last fiscal.

This was its highest ever consolidated quarterly profit.

For the quarter ended September 30, total revenue from operations rose by 21.7 per cent to ₹5,593.22 crore from ₹4,595.17 crore in the same period last year.

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“The company, through its subsidiaries, continues to maintain its track record of delivering strong performance through market and macroeconomic cycles, backed by its diversified business model,” it said in a statement on Monday.

Its retailisation strategy has led to the active customer base growing by 42 per cent year-on-year to about 2.8 crore.

Rise in AUM

Overall assets under management across asset management, life insurance and health insurance businesses grew 24 per cent-year on year, to over ₹3,70,290 crore.

The overall lending book (NBFC and housing finance) was ₹59,060 crore as of September 30.

The gross premium across life and health insurance for the half year grew 25 per cent year-on-year to ₹5,685 crore.

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IDFC First Bank Q2 net profit surges 50%

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Private sector lender IDFC First Bank reported a near 50 per cent jump in its standalone net profit in the second quarter of this fiscal year, driven by growth in core operating income and lower net credit losses. The bank’s standalone net profit rose by 49.6 per cent to ₹152 crore in the second quarter of the fiscal from ₹101 crore in the second quarter of last fiscal.

Net interest income grew by 27 per cent year on year to ₹2,272 crore in the quarter ended September 30, up from ₹1,784 crore in the second quarter of last fiscal. Net interest margin improved to 5.76 per cent for the second quarter of the fiscal from 4.91 per cent as on September 30, 2020, and 5.51 per cent as on June 30, 2021.

“The NIM expansion was primarily driven by the gradual improvement in the cost of funds, mainly the cost of deposits,” IDFC First Bank said in a statement on Saturday.

Also see: IOB stays on strong profit curve

Other income surged to ₹779.70 crore for the second quarter of the fiscal from ₹166 crore a year ago.

The bank said fee income growth was contributed to primarily by the fees related to retail loans, transaction fees, distribution and wealth management fees.

Provisions double

Provisions however, more than doubled and increased by 122.5 per cent to ₹474.94 crore in the July to September 2021 quarter from ₹213.4 crore a year ago. But on a sequential basis, they dropped sharply from ₹1872.3 crore in the firs quarter of the current fiscal.

“The bank utilised ₹560 crore of Covid provision in the second quarter of the fiscal and carrying forward ₹165 crore of provision for future. The bank expects the net credit loss for the retail loan segment to normalise from here on assuming there is no further disruption in the economy due to a new wave of Covid-19,” IDFC First Bank said.

Asset quality remained under pressure although non performing loans declined on a sequential basis.

NPAs fall sequentially

Gross non performing assets rose to ₹4,485.52 crore as on September 30, 2021, amounting to 4.27 per cent of gross advances. This was lower than 4.61 per cent as on June 30, 2021 but significantly higher than 1.62 per cent a year ago.

Net NPAs also rose to 2.09 per cent of net advances as on September 30, 2021 compared to 0.43 per cent a year ago. But it was lower than 2.32 per cent at the end of the first quarter.

The bank said the impact of the second wave of the pandemic is gradually diminishing and this improvement is showing in the improvement in asset quality.

One infrastructure loan (Mumbai Toll Road account) had become NPA during the last quarter.

Also see: Automobile sales in the slow lane

On the overall bank level but for this one infrastructure account, which it hopes to cure in due course, the GNPA and NNPA would have been 3.47 per cent and 1.42 per cent respectively as of September 30, 2021.

Restructuring for the overall portfolio stood at 2.9 per cent of the total funded assets as of September 30, 2021.

V Vaidyanathan, Managing Director and CEO, IDFC First Bank, said, “We are seeing strong revival of the economy and strong demand for home loans, loan against property, MSME and consumer loans. The retail loan book is now highly diversified across over 10 lines of business and millions of customers.”

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Indian Bank more than doubles net profit in Q2

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Public sector lender Indian Bank reported a notable performance across parameters — double-digit growth in operating profit, more than two-fold increase net profit, reduction in net NPA, growth in CASA (current account savings account) and rise in businesses of RAM (retail, agriculture and MSME) sector – for the quarter ended September 30.

The Chennai-headquartered bank, which is now an amalgamated entity of Indian Bank and Allahabad Bank, reported net profit of ₹1,089 crore for the second quarter of this fiscal compared to ₹412 crore in Q2 of the last fiscal, helped by higher operating profit, growth in non-interest income and lower provisions.

Across parameters

Operating profit of the company grew 11 per cent to ₹3,276 crore (₹2,942 crore), on the back of 26 per cent rise in non-interest income at ₹1,966 crore (₹1,558 crore), aided by higher recovery of bad debts and forex income. Its net interest income (NII) fell marginally to ₹4,084 crore (against ₹4,144 crore).

Also see: ‘RBI should allow the rupee to appreciate’

“The bank’s net and operating profits have increased, asset quality is under control, growth is happening in RAM sectors, CASA continues to increase and improvements across functions such as digital banking,” said Shanti Lal Jain, Managing Director & CEO of Indian Bank.

Strong recovery

Total provisions were lower by 14 per cent at ₹2,187 crore (₹2,530 crore in Q2FY21). Loan loss provisions were at ₹2,216 crore (₹1,880 crore).

Fresh slippages were higher at ₹3,952 crore (₹249 crore), mainly due to an NBFC account that accounted for ₹1,821 crore.

“Barring this, slippages of about ₹2,000 crore is just 0.5 per cent of the book. But, higher recovery helped us to maintain the asset quality,” Jain said.

Cash recovery was higher at ₹831 (₹795 crore) and total recovery stood at ₹3,426 crore against ₹1,168 crore. Domestic advances grew 5 per cent to ₹374,508 crore (₹356,627 crore). Retail, Agriculture and MSME loans grew by 14 per cent (₹73,376 crore), 16 per cent (₹82,857 crore) and 8 per cent (₹70,268 crore). The three segments accounted for 60 per cent of advances.

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Total deposits grew 10 per cent to ₹551,472 crore (₹501,956 crore). CASA was maintained at 41 per cent.

Lower NPAs

Gross NPAs was at 9.56 per cent compared to 9.89 per cent in the year-ago quarter and 9.69 per cent in the previous quarter. Net NPA was higher at 3.26 per cent when compared with 2.96 per cent a year ago, but down from 3.47 per cent in the preceding quarter.

“Our SMA1 and SMA2 are decreasing and collection efficiencies are improving. With this trend, we don’t have worries on the asset quality side. Our NII has grown sequentially and we have brought the cost of deposits to below 4 per cent. Therefore, when the economy gradually hits the growth path, our credit growth will also happen. As a result, our interest income will increase,” said Jain.

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AU Bank reports 13% decline in Q2FY22 net profit

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AU Small Finance Bank reported a 13 per cent year-on-year (y-o-y) decline in second quarter net profit at ₹279 crore despite robust increase in net interest income (NII) as the bottomline in the year-ago period was bumped up by income from sale of part stake in Aavas Financiers.

The Jaipur-headquartered bank had reported a net profit of ₹322 crore in Q2FY21, including ₹126 crore from the aforementioned sale.

Net interest income (difference between interest earned and interest expended) was up 34 per cent y-o-y to ₹753 crore (₹561 crore in the year-ago quarter).

Other income, including processing fee, profit/loss on sale of investments, income from dealing in priority sector lending certificates, declined about 27 per cent y-o-y to ₹191 crore (₹261 crore).

The bank said profit on sale of investment for the previous year includes profit earned on sale of equity shares (part stake) held in Aavas Financiers.

Write-back

AU SFB received a write-back of ₹170 crore in non-performing asset (NPA) provisions in the reporting quarter. It had made a provision of ₹16 crore in the year-ago quarter.

Gross NPA position improved to 3.2 per cent of gross advances as on September-end 2021 against 4.3 per cent as at June-end 2021. Similarly, net NPA reduced to 1.7 per cent from 2.3 per cent.

Sanjay Agarwal, MD & CEO, emphasised that if the one-time gain of ₹126 crore due to part stake sale in Aavas is excluded from the year-ago period net profit, then the bank has posted a 42 per cent increase in net profit in the reporting quarter.

He observed that as the economy is improving, the bank’s customers are coming back on the loan repayment track.

Assets under management were up 24 per cent to ₹38,011 crore. Deposits increased 45 per cent y-o-y to ₹38,011 crore.

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SBI Card net up 67% in Q2

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SBI Card, the country’s largest pure play credit card issuer, on Thursday reported a 67 per cent increase in net profit for the quarter ended September 30 at ₹305 crore, up from ₹206 crore in the corresponding quarter last year.

Total revenue for the quarter under review increased 7 per cent to ₹2,695 crore (₹2,510 crore), a statement issued by the company said.

Also see: ‘RBI should allow the rupee to appreciate’

The card-in-force grew 14 per cent in second quarter to 1.26 crore (1.10 crore). While retail spends grew 41 per cent to ₹35,070 crore (₹24,863 crore), corporate spends surged 80 per cent to ₹8,491 crore (₹4,728 crore).

For the six months ended September 30, SBI Card reported a net profit of ₹650 crore, up 8 per cent from net profit of ₹599 crore recorded in the same period last year.

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Canara Bank Q2 net jumps 200% to ₹1,333 crore

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Canara Bank reported a 200 per cent year-on-year (y-o-y) jump in second quarter net profit at ₹1,333 crore against ₹444 crore in the year-ago period, supported by healthy growth in other income and lower loan loss provisions.

Net interest income (difference between interest earned and interest expended) was down a shade at ₹6,273 crore (₹6,305 crore in the year ago period).

Non-interest income, comprising fee-based income, trading income, recovery in written-off accounts, and others, was up 37.54 per cent y-o-y at ₹4,268 crore (₹3,103 crore).

Loan loss provisions declined 24 per cent y-o-y at ₹2,678 crore (₹3,533 crore).

Slippages and recovery

Fresh slippages during the quarter increased by ₹6,525 crore (₹4,253 crore in the preceding quarter). This includes ₹3,200 crore exposure to the SREI Group.

The public sector bank made higher cash recovery of ₹3,002 crore (₹1,598 crore in the preceding quarter). Upgradation and write-offs amounted to ₹2,671 crore (₹2,292 crore) and ₹1,585 crore (₹2,574 crore), respectively.

Gross non-performing assets (NPAs) position improved 8 basis points to 8.42 per cent of gross advances against 8.50 per cent as on June-end 2021.

Net NPA position improved 25 basis points to 3.21 per cent of net advances against 3.46 per cent as on June-end 2021.

LV Prabhakar, MD & CEO, observed that going forward, the bank’s balancesheet will strengthen further, with gross non-performing assets (excluding transfer of stressed assets to the National Asset Reconstruction Company) expected to decline to at least 7.5 per cent by March-end 2022 and credit growth (global) projected at 7.5 per cent for FY22, seen picking up steam from third quarter onwards.

The bank recovered about ₹1,700 crore from DHFL’s corporate insolvency resolution process (CIRP) and made 50 per cent provision towards its exposure to the SREI Group, which has become a non-performing account, Prabhakar said.

Net interest margin declined to 2.72 per cent from 2.82 per cent as on September-end 2020.

Global (domestic plus overseas) gross advances grew about 6 per cent y-o-y to ₹6,86,813 crore.

Within domestic advances (which were up 5.71 per cent yoy), Agriculture & Allied advances grew by 13.92 per cent; retail (10.46 per cent); MSME (0.31 per cent); and corporate and others (2.23 per cent). Overseas advances increased by 9.36 per cent yoy.

Global Deposits rose about 9 per cent to ₹10,32,536 crore. Domestic deposits and overseas deposits increased by 7.61 per cent and 38.15 per cent, respectively.

The proportion of low-cost CASA deposits improved to 34.11 per cent in total domestic deposits as at September-end 2021 against 32.77 per cent as at September-end 2020.

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