Aspire Home Finance's net loss at Rs 97 cr in third quarter ended Dec 2018

Huge provision bill hit bottomlime

Hit by huge provisions for bad loans, Aspire Home Finance, a unit of Motilal Oswal Securities, has booked a net loss of Rs 97 crore in the third quarter ended December 2018 (Q3Fy19) as against profit of Rs 7.6 crore in Q3Fy18.

Its Net Interest income (NII) declined from Rs 57.7 crore in October-December 2017 (Q3Fy18) to Rs 52.3 crore in Q3Fy19. NII fell mainly on account of lower interest income due to reduction in loan book led by higher write offs and lower disbursements.

Its provisions/write-off for bad loans stood at Rs 178 crore in Q3Fy19 as against Rs 29 crore in same quarter last year. The provisions were higher due to clean up of the legacy book. The provisions including write offs stands at 69% as of Q3FY19. Strong support from parent with capital infusion of Rs 200 crore in Q3FY19 taking total capital infusion to Rs 850 crore. Loan book stood at Rs 4,400 crore as of December 2018.

Asset quality deterioration was on account of seasoning of legacy portfolio. However, proactive clean-up of the legacy book, expected positive trends in disbursements and improvement in collection efficiency augur well for future asset quality and profitability outlook.