Tag: SME

Private banks lead, overall NPA provisioning falls in Q2, BFSI News, ET BFSI

Banking & Finance

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The worst seems to be over for banks in the pandemic, going by the drop in bad loan provisioning numbers. The bad loan provisioning by banks fell sequentially for the second consecutive quarter in the three months ended September 2021, led by a significant drop in some of the private sector banks. The trend is likely to continue on account of improved collections and lower slippages.

The aggregate provisioning towards non-performing assets (NPA) or loan loss provision for a sample of 29 banks fell by 20.5 per cent sequentially and 10.9 per cent year-on-year to Rs 30,400 crore. It has softened over the past two quarters after peaking at Rs 65,986.9 crore in the March 2021 quarter when banks resumed accounting for slippages.

Private banks at the forefront

The fall in the September quarter was driven by a sharp 43.9 per cent drop in loan loss provisioning by the private sector banks at the aggregate level. Top banks including HDFC Bank, Axis Bank, Kotak Bank, and IndusInd Bank recorded a double-digit sequential drop in the NPA provisioning.

The public sector banks on the other hand reported a modest 1.6 per cent fall in the NPA provisioning. Their share in the sample’s NPA provisioning increased to 68.5 per cent from 55.3 per cent in the previous quarter.

Analysts expect the asset quality of banks to improve gradually in the coming quarters following a pick up in economic activity and recovery in collections.

“Banks slippage ratios reduced substantially by 100 basis points QoQ on an average in the September quarter. The asset quality situation is likely to improve further driven by a reduction in retail as well as SME nonperforming loans in the coming quarters,” a Macquarie Capital Securities (India) note said.

The banks’ net interest income increased by 3.7 per cent sequentially and 2.4 per cent year-on-year to Rs 1.3 lakh crore. The sequential growth was faster for PSU banks at 5 per cent compared with 2.1 per cent for the private sector banks.



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BSE joins hand with HDFC Bank to promote startup, SME listing, BFSI News, ET BFSI

Banking & Finance

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New Delhi, Leading stock exchange BSE on Tuesday said it has collaborated with private sector lender HDFC Bank to further encourage and promote the listing of startups and small and medium enterprises (SMEs) across India. Through this pact, HDFC Bank and BSE will evaluate banking and lending solutions for startups, undergoing listing process on startups and SME platform, the exchange said in a statement.

HDFC Bank will identify potential startups as well as SMEs and help them to partner with intermediaries like merchant bankers, chartered accountants and lawyers to list on BSE.

Both the parties have agreed to conduct and participate in joint outreach activities and contribute to each other’s publications on the startup ecosystem in India.

“Through this MoU (Memorandum of Understanding), we aim to resolve funding constraints for startups and SMEs in India. BSE along with HDFC Bank shall work together to create a sustainable ecosystem for startups and SMEs,” Ajay Thakur, Head, BSE SME and startups, said.

“Startups are reimagining and reshaping the world we live in. At HDFC Bank, we are committed to developing, strengthening and collaborating with the startup community and ecosystem in the country,” said Iqbal Singh Guilani, SVP, Retail Branch Banking, HDFC Bank.

BSE became the first stock exchange to get approval from markets regulator Sebi and had launched its SME platform in March 2012.

So far, 353 companies listed on the BSE SME Platform have raised Rs 3,732 crore from the market, and the total market capitalisation of such firms stood at Rs 38,538 crore. Out of 353 companies, 117 have migrated to BSE Main Board.

BSE is the market leader in this segment, with a market share of 61 per cent.



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Banks set for a sharp earnings rise in Q2, may face asset quality jitters, BFSI News, ET BFSI

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Indian banks’ earnings are likely to pick up in the September quarter, led by a recovery in business growth, fee income and a gradual reduction in credit costs.

However, they may be tempered by higher provisioning in the retail and small and medium enterprises (SME) loan segments that have seen higher delinquencies.

Earnings growth

Private banks are likely to report PPoP growth of 9% YoY (3.8% QoQ) and net profit growth of 14% YoY (17.3% QoQ). Earnings are likely to pick up, led by recovery in business growth / fee income and a gradual reduction in credit costs.

“Loan growth would pick up, led by revival in economic activity and the opening up of the economy. Demand going into the festive season and commentary around the FY22 outlook would be key monitorables. Retail and SME segment is likely to show strong recovery; though growth in the Corporate segment is likely to remain soft and recovery within this segment would be another monitorable,” according to Motilal Oswal Securities.

Banks are likely to report earnings growth of 41% in the fiscal year 2021-22, it said.

PSBs to report improved operating performance, supported by modest business growth and a gradual reduction in provisions. Opex is likely to remain elevated on account of the revised guidelines on pension provisions.

SBI NPAs may decline

As per analyst estimates, State Bank of India could post a further decline in bad loans and could see a moderation in credit costs. Private lender ICICI Bank appears firmly placed to deliver healthy sustainable growth, led by its focus on core operating performance. It may utilise higher buffers in case of a possible asset quality impact.

Exchange filings have shown HDFC Bank has posted strong credit growth in the September quarter and after the embargo being lifted on sanctioning credit cards, the bank is poised for a healthy revival in retail loans.

Estimates suggest that ICICI Bank could deliver 16.6% year-on-year loan growth, while Axis Bank and Kotak Mahindra Bank could grow over 9% each.

For state-run banks, operating expense is likely to remain elevated on account of the revised guidelines on pension provisions.

Asset quality

Asset quality could pose challenges with near-term slippages expected in the retail, SME and microfinance segments. Though analysts said there could be a decline over the June quarter.

Slippages would remain elevated, led by the Retail and SME segment; however, the quantum is likely to moderate, keeping asset quality in check – barring mid-sized banks, which could see marginal deterioration. Corporate slippages could see an uptick due to the downgrade of SREI Infra which is likely to get offset by the recoveries from DHFL resolution



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ICICI Bank to offer instant overdraft to sellers registered on Amazon India, BFSI News, ET BFSI

Banking & Finance

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ICICI Bank has announced that it has partnered with Amazon India to offer overdraft (OD) facility upto Rs 25 lakh to individual sellers and small businesses registered on the e-commerce company’s online marketplace, instantaneously and digitally. Driven by API integration, the partnership enables sellers to avail an OD from the Bank in a process, from application to sanction to disbursement, that is digital. Customers of other banks can avail the facility from ICICI Bank, if they are registered as sellers with amazon.in.

ICICI Bank has developed this new facility that functions on the back of an industry-first scorecard to evaluate credit worthiness of sellers based on their financial profile including Credit Bureau scores.

The new credit assessment method offers convenience to the sellers as it does away with the paper-intensive bank statements or income tax returns for assessing credit worthiness. Further, it empowers small businesses and individual sellers who are ‘new-to-credit’ and ‘existing MSME borrowers’ to unlock the value of their digital transactions and get access to instant credit.

In a statement, Pankaj Gadgil, Head- Self Employed Segment, SME & Merchant Ecosystem, ICICI Bank said, “This process will help the sellers, who may otherwise not get access to adequate credit when assessed in the traditional way of using only balance sheets, bank statements and tax returns. This new proposition resonates our effort in developing innovations for MSME customers and will empower them with new avenues of business expansion.”
Benefits of InstaOD:

  • Online loan application: Sellers registered on amazon.in can apply for the OD instantly online through amazon.in.
  • Easy process: The Bank evaluates sellers making the loan approval process easy and quick. This is an improvement over the typical process which demands sellers to go through the tedious paper-intensive process of submitting income tax returns, bank statements and GST returns.
  • Instant sanction and disbursal: The approved OD amount is instantly sanctioned and disbursed into the seller’s current account
  • Pay for what you use: Sellers only need to pay interest on the amount of OD utilised by them
  • Auto-renewal facility: The OD is renewable on an annual basis, depending on the repayment track records of the seller

“We are prioritizing our efforts to help sellers on amazon.in bounce back from the disruption owing to COVID-19. We want to enable easy access to credit for sellers with transparent policies and at low costs” said Vikas Bansal, Director – Amazon Pay India, in a statement.



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Why Factoring failed to address delayed payments for MSMEs and how recent amendments can help, BFSI News, ET BFSI

Banking & Finance

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The Factoring Regulation (Amendment) Bill, was recently passed by the Rajya Sabha to provide an efficient working capital cycle for micro, small and medium enterprises (MSMEs) and in turn provide a boost to the economy of the country. The amendment bill aims at expanding credit facilities for small businesses and access to funds from thousands of non-banking financial companies (NBFCs). The basic purpose of this bill is to make available the factoring service of well over 5000 NBFCs to the starved MSME sector where currently a lot of businesses are suffering due to lack of funds.

The change is marked to bring about a key legislation to make it easier for small businesses to monetize their receivables. The bill was tabled in September last year and was recently passed on 29th July, 2021. The amendment bill makes it easier for NBFCs to participate in the factoring business. It also removes the tedious requirement of an entity in this business to report factoring information within 30 days.

The 2011 Factoring Regulation Act allowed the Reserve Bank of India (RBI) to authorise NBFCs to remain in Factoring business only if that’s their main focus of the business and over 50% of their assets have been deployed and 50% of their revenue is earned from the factoring business. This bill aims at removing this threshold which will open new avenues in this business to more non-bank lenders at the current times of financial stress during the pandemic.

What is Factoring and why is it important?
Factoring is a transaction where the accounts receivables of an entity, known as the factor, is paid by another entity, known as the assignor. A factor can be a bank or an NBFC or any institution registered under the Companies Act. Factoring helps businesses to monetize its receivables quickly and tackle cash-flow problems conveniently and in time. This bill enables NBFCs and other companies to enter the factoring businesses and help small businesses survive during these difficult times. The move will help bring down the overall cost to acquire funds and empower small businesses to generate cashflows even at difficult times. The provision of liquidity to support MSMEs have been a key element of the government’s plans and policies to cushion the impact of the pandemic. Empowering the MSMEs is important because they are a major source of employment generation in the rural and urban areas.

Finance Minister Nirmala Sitharaman said, “Amending the Factoring Regulation Act, and changing the definition of “assignment”, “factoring business” and “receivables”, “will bring them in consonance with international definitions”, she further added, “The Bill seeks to provide a strong oversight mechanism for the factoring ecosystem, and will empower the Reserve Bank of India to make regulations with respect to factoring business”.

Currently due to the number of issues, the factoring credit constitutes only 2.6 percent of total formal SME credit finance in India. The estimate points out that only 10% of the receivable market is presently covered under the bill discounting system while the rest is covered under conventional cash credit overdraft arrangements with financial institutions. The delay in getting payments against their bills, the MSMEs struggle with working capital and it hampers with the efficient activity and functioning of the MSMEs and this bill aims to remedy just that.

Factoring and its growth in China
We already discussed factoring, but China adopted Factoring in a big way a decade ago and they are far ahead of the world as far as the number of MSMEs are concerned. They have adopted debtor financing where the company sells accounts receivables at a discount to clear current debts and seek capital for smooth functioning of the business. Banking and e-commerce sector has found this to be a sustainable business model across various industries.

Large companies, especially e-commerce, set up in-house financing or Factoring company as a subsidiary to fund and support thousands of small and medium enterprise clients, with huge amounts of receivables in the ledger. This dual layered model of factoring is called double factoring. Banks finance the subsidiaries which are a separate entity from the company being funded within the umbrella.

Double factoring helps suppliers meet their immediate credit and cash flow needs and increases the asset liquidity of the in-house factoring entities. The costs of funding reduces significantly from that of a bank and proves beneficial in the long run.

Conclusion
Factoring is an important step towards stabilizing the economy in current times. NBFCS can come to the aid of the cash-starved MSMEs and help them with their financing needs.

In the current environment where access to finance is critical to jumpstarting economic growth, the Factoring Regulation Bill may play a key role in bridging the gap and helping Indian businesses push forward into 2022.

In the past, in other countries, what we’ve seen is that a more liberalized approach to factoring takes the pressure off lending institutions – this means more access to capital for the businesses that need it. In the long term, the implications here are clear. The Factoring Regulation Bill isn’t just going to help businesses come out of the pandemic induced crisis situation. As we move into the next decade, the enhanced access to capital will help Indian businesses drive consistent economic growth.

(The writer is Co-founder, Cashinvoice)



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Neobanks are crucial for SME, MSE and retail customers., BFSI News, ET BFSI

Banking & Finance

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Today Neo-banks are disrupting the banking system with their customer-centric digital offerings across retail and Small-to-Medium Enterprise (SME) banking, remittances, money transfers, utility payments and personal finance. They focus on applying design thinking approach to a particular banking area and tailor their products, services and processes in a manner that makes banking simpler and convenient. This has provided a differentiated experience to the end user, resulting in higher client adoption rates.

Globally, top neo-banks have captured the attention of investors, which is reflected in their high valuations. Neo-banks are able to attract funding due to their disruptive capabilities and innovative approach to the way financial services are offered. For example:

  • A U.K.-based neo-bank is now the most valuable fintech firm at ~USD30 billion as of 2021 as it raised USD750+ million for product development and expansion.
  • A U.S.-based startup that delivers mobile banking services (like savings account and VISA debit cards) was valued at USD14+ billion in 2020.
  • An e-commerce giant, a multinational technology company and a multinational financial services corporation are separately eyeing a stake in a neo-bank, which is looking to raise ~USD100+ million. If it does manage to raise the amount, its valuation is likely to jump three times to around USD600+ million.

The global neo-banking market size is expected to reach USD333.4 billion by 2026, a market growth of 47.1 per cent CAGR over the next five years.Countries like the U.S. and Australia have licensed neo-banks, whereas in India, these are not licensed banks. Neo-banks collaborate with commercial banks to provide better adoptable solutions across business segments with the use of technology like open banking APIs, artificial intelligence, machine learning and data science. This dual combination creates value as the neo-bank handles technology and innovation while the licensed bank handles trust, franchise, risk, underwriting and collections. Low-cost operations of neo-banks result in better offerings and promotes business. However, the key value addition that neo-banks provide is a seamless and integrated customer experience while managing their financing and business banking needs. This is done through providing an integrated platform for automated transaction banking, payments, tax compliance, accounting services, investment needs, etc.

Case Study -1 – Building Current Account Balance with SME Focus

A Neo-bank offers a business banking platform over current accounts that helps SMEs automate and run their finances effectively. This platform seeks to integrate banking into an SME’s business workflow through APIs, instant receipts and payments gateway, real time cashflow monitoring, automated accounting and bookkeeping, payroll management, and vendor management. The platform is estimated to process USD10-15 billions in transactions annually with its multiple bank tie-up.

Case Study -2 – Enhance retail customer experience of traditional bank

While attempting to provide better customer experience, traditional banks face challenges of seamlessly integrating different platforms that run processing, card controls, authentication, rewards, etc. A Neo- bank helps such banks by providing a single integrated, modular, cloud-native, mobile first, banking platform that enables financial institutions to provide next-gen banking experiences to customers, thereby increasing customer engagement, retention and revenue. The customer gets a high degree of personalisation through value-added features like faster account opening, simplified money tracking, smart reporting, low cost international payments and money transfers, better interest rates on loans and deposits, globally accessible debit cards, etc. These measures result in higher adoption rates.

In India, banks and neo-banks have struck a collaborative partnership. While banks remain the money custodian, neo-banks are emerging as the crucial data and technology via medium for empowering the customer. However, this can also be seen as a roadblock for the neo-banks as they might never be allowed to operate independently, and the rising number of emerging fintech companies are making the environment highly competitive. Although neo-banks are scaling up their presence, there is a lack of regulations as the 100 per cent digital bank model has not been permitted in India yet.

In summary, as the regulatory landscape evolves, neo-banks can play an important role to address SME, Midsize Enterprise (MSE) and retail individual customer requirements beyond traditional banking in a seamless and integrated environment.

Written By- Sanjay Doshi (Partner and Head – Financial Services Advisory, KPMG in India) and
Amit Wagh ( Partner and Leader – Financial Services Business Consulting, KPMG in India)

DISCLAIMER: The views expressed are solely of the author and ETBFSI.com does not necessarily subscribe to it. ETBFSI.com shall not be responsible for any damage caused to any person/organisation directly or indirectly.



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DCB Bank gets RBI nod to conduct govt related transactions, BFSI News, ET BFSI

Banking & Finance

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DCB Bank on Thursday said it has received RBI nod to conduct government related transactions. The Reserve Bank has empanelled DCB Bank as an agency bank to facilitate banking and payment transactions for the central and state governments, it said in a release.

This empanelment follows the announcement by the Finance Ministry in May 2021 lifting the embargo on further allocation of government business to private sector banks.

Through this arrangement, DCB Bank will carry out specific banking services on behalf of both the central and state governments, while continuing to offer SME, micro SME and individual customers the convenience of routine financial transactions through its advanced banking platform, it said.

“DCB Bank’s focus is SME, micro SME, agri and inclusive banking, we look forward to supporting them by providing access to CBDT, CBIC, GST transactions amongst others,” said Praveen Kutty, Head of Retail Banking, DCB Bank.



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Banks head towards recovery after challenging environment due to the second wave of covid-19, BFSI News, ET BFSI

Banking & Finance

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The second Covid-19 wave has impacted the recovery and lending activities of commercial banks. From tackling scattered lockdowns to managing recovery and collections, banks are expecting a recovery phase in the coming quarters.

Private lender Federal Bank recorded the highest ever operating profit of Rs.1135 Cr with 22% Y-o-Y growth in Q1FY22. The total business of the bank reached Rs. 299158.36 Cr registering Y-o-Y growth of 8.30% as of 30th June 2021.

Shyam Srinivasan, Managing Director, and CEO, Federal Bank said in a statement, “The external environment continues to be challenging however we have managed to keep our operating momentum intact by delivering our highest ever operating profit, for the quarter. Our CASA ratio is at an all-time high and we continue to build a granular liability franchise with more than 90% of our deposits being retail in nature. Our relationship with the NR diaspora continues to blossom with our share in personal inward remittances increasing to 18.20%. We have also managed to keep asset quality in check with only a marginal uptick in GNPA and NNPA.”

Shyam Srinivasan (File Pic)

On similar lines, IDFC FIRST Bank in its Q1FY22 financial results announced the highest ever core pre-provisioning operating profit at Rs. 601 Crore. Total Income grew by 36% YoY basis to reach Rs. 3,034 crore in Q1FY22.

V Vaidyanathan, Managing Director, and CEO, IDFC FIRST Bank, said in a statement, “Our CASA ratio is high at 50.86% despite reducing savings account interest rates by 200 bps recently. Because of our low-cost CASA, we can now participate in prime home loans business, which is a large business opportunity.”

“Regarding the loss during the quarter, we have made prudent provisions for COVID second wave, and expect provisions to reduce for the rest of the three quarters in FY 22. We guide for achieving pre- COVID level Gross and Net NPA, with targeted credit loss of only 2% on our retail book by Q4 FY 22 and onwards, assuming no further lockdowns.” Vaidyanathan added.
Banks head towards recovery after challenging environment due to the second wave of covid-19
South-based lender CSB Bank in its First Quarter results announced a profit after tax at Rs 61 Cr in Q1FY22 as against Rs 53.56 Cr in Q1FY21 and Rs 42.89 Cr for the sequential quarter. Net profit increased by 14% YoY. The operating profit of the bank is Rs 179.78 Cr with a Y-o-Y -growth of 39%.

CVR Rajendran, Managing Director & CEO at CSB Bank said in a statement, “COVID second wave coupled with the LTV management of gold loans did pose some challenges in the first quarter of FY 22. Lockdowns, alternate holidays, slowing down of economic activity, controlled movements due to strict social distancing norms, lack of transport, etc restricted the customer access to branches which in turn impacted both the fresh pledges and releases. Thankfully, the worst seems to be over now and recoveries are happening in full swing. The portfolio LTV that was at 83% has been brought down to 75%. The aggressive vaccination push and controlled localised lockdowns have helped in managing the second wave to a great extent and we are optimistic to catch up the business opportunities on a larger scale from this quarter.
Banks head towards recovery after challenging environment due to the second wave of covid-19
Bandhan Bank also announced its Q1FY22 results with pre-provision Operating Profit (PPOP) at 9.3%; up from 8.6% in the Q4FY21.

Chandra Shekhar Ghosh, Managing Director, and CEO of Bandhan Bank said in a statement, “Despite the challenging environment due to covid second wave, we have delivered the best-ever quarter in terms of operational performances. Collections continue to improve with covid restrictions getting relaxed. Typically, the second half of the financial year is always better for the bank in terms of growth and collections. With the easing of the covid second wave and upcoming festive season, we are confident of achieving better performance going forward.”
Banks head towards recovery after challenging environment due to the second wave of covid-19
While Axis Bank reported a 94 percent year-on-year rise in standalone net profit at Rs 2,160 crore as against Rs 1,112 crore reported in the same quarter of last year (Q1FY21).

Amitabh Chaudhry, MD & CEO, Axis Bank said, “Despite second wave headwinds, we made tremendous progress this quarter on our strategy of building a high-quality granular franchise, increasing our relevance in the lives of the customers and the communities we serve, and building the best digital bank in the country,”

“The journey we started two years back is gathering momentum with a strong balance sheet, conservative provisions, and a steady operating performance supporting our aspirations. We have also set a bold mandate for our long-term ESG goals. We continue to monitor the macroeconomic environment closely and we remain confident about our strategy and the road ahead,” Chaudhry said.

Amitabh Chaudhry (File Pic)
Amitabh Chaudhry (File Pic)

The country’s largest lender, The State Bank of India recorded its highest-ever quarterly profit at Rs 6,504 cr. in Q1FY21. This implied a 55-per cent year-on-year (YoY) rise in net profit compared to Rs 4,189.34 crore in the year-ago period.
Dinesh Khara, chairman of SBI said, “Around 50% of our home loan book is to non-salaried customers which belong to the SME segment,”
Banks head towards recovery after challenging environment due to the second wave of covid-19
“The slippages are largely because of the disruption in the SME segment.” He also said, “SBI is expecting a credit growth of 9% during this financial year. The under-utilization of credit lines by borrowers in our corporate clients group has dropped to 25%,” Khara said. “That’s a positive,” he added.

SBI says that the bank is gearing up on several fronts to mitigate all the challenges posed by the spread of the COVID-19 pandemic.



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Pick up in disbursements, fall in provisions & more, BFSI News, ET BFSI

Banking & Finance

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NEW DELHI: ICICI Bank‘s 78 per cent profit growth YoY largely met Street expectations. The 18 per cent growth in net interest income was higher than 14-16 per cent growth anticipated by an ETMarkets.com poll. Provisions fell 63 per cent against expectations of an up to 70 per cent drop. Net interest margin (NIM) rose to 3.89 per cent while asset quality, as suggested by gross non-performing assets (NPAs), deteriorated marginally. Here are the key takeaways from the quarterly results:

Profit in line, NII beats expectations
ICICI Bank’s 78 per cent rise in June quarter was largely in line with an ETMarkets.com poll estimate of 77 per cent growth.

The bottonline growth was lower than 260.47 per cent growth in profit the bank reported in March quarter, but higher than 36 per cent profit growth it reported in the year-ago quarter.

NII growth for the quarter at 15-16 per cent beat expectations. Analysts at an ET NOW poll had expected NII growth at 14 per cent.

Disbursements pick up
ICICI Bank said retail disbursements have picked up in June and July after moderating in April and May due to Covid containment measures in place across various parts of the country.

The disbursement levels, it said, recovered to March levels in June, driven by spending in categories like consumer durables, utilities, education, and insurance. Credits received in the overdraft accounts of business banking and SME customers also picked up in June and July after declining in April and May, it said.

Provisions fall, NPA rises marginally
ICICI Bank said it has changed its policy on non-performing loans during the June quarter to make it more conservative. Provisions for the quarter fell 63 per cent to Rs 2,852 crore from Rs 7,594 crore against expectations of up to 70 per cent fall. This could be due to the bank’s policy change, which the bank said resulted in higher provision on non-performing advances amounting to Rs 1,127 crore for aligning provisions on outstanding loans to the revised policy.

Gross non-performing assets, meanwhile, rose to 5.15 per cent against 4.96 per cent in the March quarter and 5.46 per cent in the year-ago quarter.

Recoveries and upgrades of NPAs, excluding write-offs and sale, stood at Rs 3,627 crore. The bank wrote off Rs 1,589 crore worth gross NPAs in June quarter. Excluding NPAs, the total fund-based outstanding to all borrowers under resolution as per the various extant regulations was Rs 4,864 crore or 0.7 per cent of the total loan portfolio.

Uncertainty still looms
In the absence of regulatory dispensations like moratorium on loan repayments and standstill on asset classification, the impact on the quality of the loan portfolio would likely be sharper and earlier during FY22, the bank said.

“The impact, including with respect to credit quality and provisions, of the Covid-19 pandemic on the bank and the group, is uncertain and will depend on the trajectory of the pandemic, progress and effectiveness of the vaccination programme, the effectiveness of current and future steps taken by the government and central bank to mitigate the economic impact,” it said.

Retail loan growth up 20%, SME 43%
Retail loan portfolio comprised 61.4 per cent of the total loan portfolio as of June 30. Including non-fund outstanding, retail accounted for 50.4 per cent of the total portfolio as on June 30.

For the quarter, the credit growth for the retail segment stood at 20 per cent. The business banking portfolio climbed 53 per cent YoY and was 5.4 per cent of total loans on June 30. The SME business, comprising borrowers with a turnover of less than Rs 250 crore, advanced 43 per cent year-on-year and accounted for 4 per cent of total loans as on June 30.

“Growth in the domestic corporate portfolio was about 11 per cent year-on-year, driven by disbursements to higher-rated corporates and public sector undertakings across various sectors. The growth in performing domestic corporate portfolio, excluding the builder portfolio, was 15 per cent year-on-year on June 30, 2021,” it said. Overall, the credit growth was up 20 per cent, while deposit growth rose 16 per cent.

Subsidiaries reported mixed growth
Subsidiaries reported mixed growth. ICICI Securities, on a consolidated basis, saw 61 per cent YoY jump in profit at Rs 311 crore from Rs 193 crore YoY. ICICI Prudential Asset Management Company clocked 48 per cent year-on-year jump in profit at Rs 380 crore compared Rs 257 crore YoY. The profit after tax at ICICI Lombard General Insurance Company fell to Rs 152 crore from Rs 398 crore. Overall, ICICI Bank’s consolidated profit after tax came in at Rs 4,747 crore compared with Rs 4,886 in the March quarter and Rs 3,118 crore in the year-ago quarter.



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Magma Fincorp Limited Announces Name Change to Poonawalla Fincorp Limited, BFSI News, ET BFSI

Personal Finance

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Business Wire India

Mr. Adar Poonawalla

Magma Fincorp Limited, a RBI-registered non-banking finance company (NBFC) has been rechristened as Poonawalla Fincorp Limited and has initiated rebranding activity, following the acquisition of controlling stake by Adar Poonawalla led Rising Sun Holdings Private Limited on 21st May 2021. Along with this, its fully owned housing finance subsidiary Magma Housing Finance Limited is also renamed as Poonawalla Housing Finance Limited.

In its new avatar under Poonawalla brand, the group will be focusing on consumer and MSME segments. As a part of the new strategy, the company will expand its product range to include Personal Loans, Loans to Professionals, Merchant Cash Advances, Loan against Property, Consumer Finance and Machinery Loans along with existing products of Business Loan, Pre-Owned Car Loans and Home Loans. Earlier this month the board had approved a proposal to enter a co-branded credit card arrangement for issuance of co-branded credit cards, subject to obtaining necessary approvals from the regulatory authority(ies). The company offers complete transparency in its offerings with no hidden charges and a fully customer centric approach.

Mr. Adar Poonawalla, Chairman, Poonawalla Fincorp Limited said, “We are delighted to announce the rebranding of Magma Fincorp under the Poonawalla brand as “Poonawalla Fincorp”. This marks the beginning of not only a change of brand but the fundamental way in which we will do business. From new products to new geographic locations across India; we hope to serve every citizen, helping them in fulfilling their personal and professional aspirations.,About Poonawalla Fincorp Limited

Poonawalla Fincorp Limited (Formerly known as Magma Fincorp Limited) is non-deposit taking non-banking finance Company (NBFC), registered with the Reserve Bank of India (RBI). The Company started operations nearly three decades back and is listed on the BSE Limited and the National Stock Exchange in India. Consequent to the capital raise of Rs 3,456 Crore in May ’21, the Company is now part of Poonawalla Group with majority stake owned by Rising Sun Holdings Private Limited, a Company owned and controlled by Mr. Adar Poonawalla.

The Company’s new identity “P, stands for Passion, Principles, Purpose, People and Possibilities. Poonawalla Fincorp Limited (“PFL,) has a widespread coverage and presence across 21 States, 297 Branches and the customer base stands at approximately 5.4 million with a loan book of more than Rs. 14,000 crores. The Company offers a bouquet of financial products including SME finance, mortgage finance, unsecured loans, and general insurance.

For more information, please log on to: www.poonawallafincorp.com



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