Latest news with #UdayaKumarHebbar
Time of India
5 days ago
- Business
- Time of India
Signs of revival: Five listed NBFC-MFIs take Rs 2,440 cr bad loans off balance sheets in Jan-March
Kolkata: Microfinance lenders accelerated the cleansing of their balance sheets in January-March, taking a further hit on profitability as the burden of stressed loans refused to ease, with the once-reputed credit culture of bottom-of-the-pyramid borrowers waning. The write-off was part of a strategy to bite the bullet and be future-ready as the industry expects a turnaround in a quarter or two. The five publicly listed non-banking finance companies-microfinance institutions (NBFC-MFIs)—CreditAccess. Grameen, Fusion Finance , Muthoot Microfin , Satin Creditcare Network and Spandana Sphoorty —cumulatively wrote off bad loans worth Rs 2,440 crore in the fourth quarter of FY25, compared with less than Rs 300 crore in the year-ago period. The idea is to begin the fiscal year by shedding the stickiest and ageing non-performing assets from the balance sheet . Writing off loans needs full provisioning against those accounts. Accelerated write-offs require lenders to raise the provisioning level and take a larger hit on the profit and loss account. 'While challenges remain, the early signals are encouraging, showing a clear reversal,' said HP Singh, chairman of Satin, on a post-earnings analyst call. He noted that at times, only disruption can shake companies out of complacency and force a transformation. 'This perfectly captures the spirit of FY25 — a year many in India's microfinance sector might remember as a testing period, others as a wake-up call.' Satin was the sole listed NBFC-MFI that was profitable in all four quarters of FY25. Udaya Kumar Hebbar, managing director of CreditAccess Grameen , said on an analyst call, 'The rising delinquency trend in the microfinance industry, which began in April 2024, peaked in November 2024, subsequently reversing till March 2025. We are already witnessing a new PAR ( portfolio at risk) accretion rate largely getting normalised across all states, excluding Karnataka.' CreditAccess is the country's largest NBFC-MFI. Live Events HEAVY LOAD Gross non-performing assets (NPAs) before the technical write-off hit a record Rs 61,000 crore at the end of March, up from Rs 38,000 crore a year prior to that, as borrowers defaulted due to over-indebtedness. The sector's cumulative gross loan portfolio contracted by about 7% to Rs 3.81 lakh crore at the end of the March quarter, from the year earlier, as lenders slowed disbursement to prevent further loan losses. Lenders write off loans when there is no realistic prospect of recovery. Accelerated write-offs contribute to elevated credit costs, impacting the profit and loss account. Recoveries against such written-off loans, if any, will get credited to the profit and loss statement. The move was forced by growing customer overleveraging, crumbling of the joint liability model, rising staff attrition and disruptions in Karnataka and Tamil Nadu. For instance, Fusion wrote off Rs 917 crore during the fourth quarter alone, nearly 40% of the cumulative write-offs by listed NBFC-MFIs. To put this into perspective, it had written off Rs 970 crore (net of recoveries) in the past 14 years before FY25. Satin had never written off loans before FY25 despite repayment disruptions during events such as demonetisation and the pandemic. Spandana, which is now under regulatory scrutiny for alleged misreporting and suppression of fraud, wrote off Rs 1,555 crore over the four quarters of FY25. 'The MFI industry stood at a critical juncture, facing formidable challenges,' said Singh of Satin. 'Institutions had to navigate a shifting landscape, clients experienced heightened vulnerability and the sector as a whole was compelled to rethink long-held assumptions.' It forced the sector to pause, reflect and reset, he said. 'These disruptions served as a catalyst, driving deep introspection, operational recalibration and a renewed focus on fundamentals,' Singh said.
&w=3840&q=100)
Business Standard
16-05-2025
- Business
- Business Standard
CreditAccess Grameen Q4 results: Net profit down 88.1% at ₹47.2 crore
Microfinance lender CreditAccess Grameen Ltd reported an 88.1 per cent year-on-year (YoY) decline in net profit to ₹47.2 crore for the quarter ended March 2025 (Q4FY25), owing to conservative provisioning and accelerated write-offs. For the full financial year FY25, the company's net profit rose 63.2 per cent YoY to ₹531.4 crore. Its stock closed 0.9 per cent higher at ₹1,204.90 per share on the BSE. In a filing with the exchanges, the company said its net interest income (NII) declined 5.0 per cent to ₹876.1 crore in Q4FY25. Its net interest margin dropped to 12.7 per cent from 13.1 per cent in Q4FY24. The total write-off stood at ₹518.2 crore in Q4, including ₹479.2 crore in accelerated write-offs, resulting in an additional credit cost of ₹150.7 crore. Gross non-performing assets (NPAs) rose sharply to 4.76 per cent as of March 2025, up from 1.18 per cent a year ago. The microfinance lender's gross loan portfolio declined by 2.9 per cent YoY to ₹25,948 crore as of March 2025. Considering the evolving business environment, the company is targeting loan portfolio growth of 14–18 per cent in FY26. Of this, growth in the microfinance segment will be 8–12 per cent, with the remainder coming from retail finance, said Ganesh Narayanan, Chief Executive Officer of CreditAccess Grameen. Udaya Kumar Hebbar, Managing Director of the company, said the continued effort to address ground-level challenges, reduce customer leverage, and expand the on-ground workforce has significantly improved customer engagement. 'This has enabled more frequent and disciplined follow-ups on delinquent accounts, resulting in improved collections,' the company said in a statement.
