L&T Finance Holding expects 15-17% loan growth in Fy14

Company continues to follow cautious approach to credit selection and hence disbursements in B2B segment have been muted

L&T Finance Holdings Ltd today said its loan and advances are expected to growth at 15-17% for year ending March 2014. The banking aspirant clocked a year on year growth of 21.1% at Rs 37,820 crore by end of December 2013.

N Sivaraman, whole-time director and president said there has been a general slowdown in the economy that has been characterized by absence of new capital expenditure, stretched working capital cycles of corporate and resulted in a subdued investment climate.

Consequently the company continues to follow a cautious approach to credit selection and hence disbursements in B2B segment (corporate, construction equipment and commercial vehicle segments) have been muted, he said.

Referring to the trend in interest margins, Sivaraman said it expects the margins to improve by 10-15 basis points. The company had posted 5.32% in the third quarter ended December 2013, up from 5.28% in Q3 of 2012-13.

It posted consolidated net profit of Rs 109.68 crore for the third quarter (December 2013) down from Rs 294.62 crore in the same quarter of 2012-13. The total income was Rs 1,315.23 crore as against Rs 993.05 crore in Q3 in FY13.

The continuing stress in the economy has resulted in slippages in asset quality mainly in the construction equipment, commercial vehicle and corporate segments. Gross Non-performing assets stood at 2.93% of loan assets (December 2013) as compared to 2.89% as on 30th September 2013.