India's Manappuram Finance posts drop in profit on microfinance weakness
The company's consolidated net profit fell 75% year-on-year to 1.38 billion rupees for the quarter ended June 30.
Indian lenders have been reporting rising default rates in microfinance loans - collateral-free small loans to borrowers - following a period of aggressive lending in the segment.
Bad loans and provisions in Manappuram's microfinance unit nearly tripled to 4.83 billion rupees, accounting for a large chunk of the total company-wide provisions of 5.59 billion rupees.
Its net interest income - the difference between interest earned and paid out - declined 14.2% to 14.07 billion rupees.
Revenue from the microfinance business fell 53.5% to 3.61 billion rupees, while revenue from the gold loan segment rose 10% to 19.04 billion rupees as bullion prices climbed in the quarter. The segment contributes 84% of total revenue.
The company's total assets under management fell 1.4% to 443.04 billion rupees.
Manappuram approved the appointment of V. P. Nandakumar as the chairman of the company on Friday.
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