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Informist, Friday, May 16, 2025

 

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--CreditAccess Jan-Mar net profit INR 472.10 mln vs INR 3.97 bln year ago 
--CreditAccess Jan-Mar total income INR 14.08 bln vs INR 14.59 bln year ago 
--CreditAccess board OKs raising up to INR 20 bln via NCDs 
--CreditAccess board appoints Ganesh Narayanan as MD, CEO effective Jun 26 
--CreditAccess FY25 net profit INR 5.31 bln vs INR 14.46 bln year ago 
--CreditAccess FY25 total income INR 57.56 bln vs INR 51.73 bln year ago 
--CreditAccess Jan-Mar net interest income INR 8.76 bln, down 5% on year 
--CreditAccess Jan-Mar NIM 12.7% vs 12.5% in Oct-Dec, 13.1% year ago 
--CreditAccess gross loan portfolio INR 259.48 bln Mar 31, down 2.9% on year 
--CreditAccess Jan-Mar loan disbursement INR 64.72 bln, down 19.6% on year 
--CreditAccess gross NPA ratio 4.76% as on Mar 31 vs 3.99% qtr ago 

 

By Christina Titus 

 

MUMBAI – CreditAccess Grameen Ltd.'s net profit slumped 88% on year in the quarter ended March as the impairments on its financial assets surged by nearly four times even as the top line fell. The microlender had posted a net loss in the December quarter.

 

The net profit of the company plummeted to INR 472.10 million in the latest quarter from INR 3.97 billion a year ago. Total expenses rose 46% on year to INR 13.57 billion in the quarter as costs incurred on impairment of financial instruments rose 280% to INR 5.83 billion. On the revenue side, total income declined 3.5% on year to INR 14.08 billion.

 

Expenses were, however, down 10% on a sequential basis as the impairment of financial instruments was higher in the December quarter at INR 7.52 billion. With increasing defaults in the microfinance sector, its primary business, the lender had posted a net loss of nearly INR 1 billion in Oct-Dec.

 

For the financial year ended March, the lender reported a net profit of INR 5.31 billion, down 63% from INR 14.46 billion a year earlier. Total income was INR 57.56 billion, up 11% from INR 51.73 billion a year ago.  

 

The lender's net interest income fell 5% on year to INR 8.76 billion during the March quarter. Consequently, net interest margin contracted to 12.7% from 13.1% a year ago, but expanded from 12.5% a quarter ago. 

 

The non-bank lender's gross loan portfolio fell 2.9% on year to INR 259.48 billion as of Mar. 31. During the quarter, the microfinance lender disbursed loans worth INR 64.72 billion, down 19.6% on year.

 

The asset quality worsened in the quarter, with the gross non-performing asset ratio at 4.76% as on Mar. 31, up from 3.99% a quarter ago. The portfolio at risk for 90 days in Karnataka was 2.4%, up from 1.2% in the December quarter. The gross loan portfolio in Karnataka constitutes 31% of the total loan book, the highest among all states. The net NPA ratio was 1.73% at March-end.

 

"Around 5% new PAR 0+ (portfolio at risk) accretion in Karnataka in Q4 FY25 (Jan-Mar), primarily due to the impact of Karnataka ordinance. Delinquency trend is expected to normalise by the end of Q1 FY26 (Apr-Jun)," the company said in the investor presentation. The state government had notified an ordinance against harsh recovery practices by microfinance companies. CreditAcess Grameen said its collection efficiency, including arrears, was 93% in March.

 

"We are well-positioned for FY26 on the back of stabilising asset quality and improving business momentum," Ganesh Narayanan, chief executive officer, said in the press release. "Considering the evolving business environment, we are aiming for AUM (asset under management) growth of 14-18% of which MFI (microfinance) growth will be 8-12% and the balance from retail finance, net interest margin of 12.6-12.8%, credit cost of 5.5-6.0%, in FY26." 

 

Along with approving the financial results, the board approved the appointment of Narayanan as managing director and CEO for five years, effective from Jun. 26. It also approved raising up to INR 20 billion in FY26 through non-convertible debentures. 

 

On Friday, shares of the lender closed 0.8% higher at INR 1,204.70 on the National Stock Exchange. The microfinance company declared its results after market hours.  End

 

Edited by Saji George Titus

 

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