M&M Financial Services eyes equity stake up to 50% in Tech Mahindra-promoted payments bank

Net up 9 % in Q4 to Rs 367 crore

Mahindra & Mahindra (M&M) Financial Services is eyeing equity participation of up to 50 per cent in the proposed payments bank to be promoted by Tech Mahindra, an associate company of Mahindra & Mahindra.

“The board has expressed desire in that space. But we will have to vet the entire proposal. We would look at the pros and cons and accordingly the board will decide. Now nothing has been decided. We are definitely interested to look at the payments bank opportunity,” said Ramesh Iyer, managing director of the company.

Tech Mahindra is among the 41 applicants for payments bank. The Reserve Bank of India (RBI)'s objectives of setting up of payments bank will be to further financial inclusion by providing small savings accounts and  payments/remittance services to migrant labour workforce, low income households, small businesses, other unorganised sector entities and other users.

Meanwhile, on Thursday M&M Financial Services declared their results where the consolidated net profit and minority interest grew 9 per cent to Rs 367 crore during the quarter ended March 31, 2015, compared with the corresponding quarter last year. The total income increased by 14 per cent at Rs 1,680 crore during the quarter ended March 31.

According to Iyer, growth has come on the back of a good recovery and lower non-performing assets (NPAs) provision and gross NPAs coming down.

However, for the financial year ending March 31, the profit after tax and minority interest declined four per cent to Rs 913 crore while the total income increased 14 per cent to Rs 6,061 crore.

“The growth drivers for this year will be deeper penetration, multi-product including second-hand vehicle financing will determine our growth. But fundamental volumes of auto, tractors etc has to go up if we have to get higher growth trajectory,” said Iyer.