The Hindu Business Line : Magma Fincorp Q2 profit up on credit growth

Money & Banking - Financial Performance
Corporate Results - Financial Institutions
Web Extras - Performance
Magma Fincorp Q2 profit up on credit growth

Mr Sanjay Chamria

Our Bureau

Kolkata, Oct 23 Riding on higher disbursements and a substantial rise in net interest margin (NIM), Magma Fincorp Ltd posted about 40 per cent rise in net profit at Rs 15.75 crore for the quarter ended September 30, against Rs 11.2 crore during the corresponding quarter last year, according to its Vice- Chairman and Managing Director, Mr Sanjay Chamria.

Though disbursements grew by just two per cent to Rs 892 crore from Rs 876 crore in the year-ago quarter, the increase was almost 21 per cent when compared to the first quarter of the current fiscal at Rs 735 crore, Mr Chamria said on Friday.

Disbursements had dropped since September last year due to the global economic slowdown; however, things started looking up since the beginning of this quarter and the company was hopeful of achieving robust disbursement figures this fiscal, he said.

Magma plans to raise Rs 2,000 crore debt funds by way of debentures, bonds and other securities by the end of this fiscal.

Magma, Mr Chamria said, had been able to deal with the economic slowdown through a series of initiatives including strengthening its robust collection mechanism, introduction of additional business verticals and a strong focus on asset quality.

“Traditionally our NIMs have been 3.6-3.8 per cent, but this time we have been able to earn a higher spread and our NIMs have surged to more than 5 per cent. This is primarily because of an increase in the disbursements of higher yielding products such as tractor loan, SME loan and used car loans where the interest rates range between 18.5 per cent and 21 per cent,” he said. The interest rate for other loans such as commercial vehicles and cars are 13.5-14 per cent, he added.

Higher yielding loans accounted for almost 13 per cent of the total disbursements during the quarter under review, up from 8 per cent during the year-ago period, he said. The company proposed to scale up the proportion of high-yielding accounts to about 15 per cent of total disbursement by the end of this fiscal and maintain a NIM of 5 per cent, he added.

More Stories on : Financial Performance | Financial Institutions | Performance

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page