Magma Fincorp net up 4.5%

Net interest income during quarter was at Rs 940 cr

Magma Fincorp said on Wednesday its consolidated net profit for the quarter ended March 31 was down 4.5 per cent from a year earlier to Rs 42.17 crore. Higher finance charges and lower lending opportunities impacted the company earnings during the three-month period.

Net interest income during the quarter was at Rs 940 crore, while net interest margin was at six per cent during this period. However, finance costs increased to Rs 297.90 crore in the January-March quarter from Rs 266.12 crore in the year-ago period.

Magma's loan book increased 10 per cent from a year earlier to Rs 17,877 crore at the end of March, 2014. Disbursements were up only five per cent. While the company reduced its commercial vehicle and commercial equipment portfolio due to the uncertain economic environment, it grew tractor loans, small and medium enterprise (SME) finance and mortgage book during the year.

The gross NPA ratio remained unchanged on a sequential basis at 3.6 per cent, while net bad loan ratio deteriorated by 20 basis points from a quarter ago to 2.9 per cent at the end of March, 2014. V Lakshmi Narasimhan, chief financial officer at Magma, said the company was hopeful that its asset quality will improve in the coming quarters.

"The worst on the portfolio quality is probably behind us. But we will continue to remain cautious and will not be looking at any dramatic growth this year. We will focus on improving our yields and portfolio quality further," he said.

On Wednesday, Magma's board also approved raising of equity capital up to Rs 500 crore. The company closed the last financial year with a capital adequacy ratio of 16.6 per cent at the end of March, 2014.