JM Financial net income jumps 14.6 pc in December quarter

JM Financial on Thursday reported a 14.6 per cent rise in its net income to Rs 157.5 crore for the December 2019 quarter, despite a muted growth in total income as its disbursals shrunk during the period.

The net income during the December 2018 quarter was Rs 137.46 crore.

The company's total income inched up 0.52 per cent to Rs 905.45 crore, the city-headquartered company said in a statement.

Reflecting the crisis in the NBFC sector since September 2018 following the bankruptcy of IL&FS and the resultant risk aversion to the sector, JM Financial saw its loan book steeply falling to Rs 12,662 crore in the quarter from a high Rs 16,136 crore in December 2018.

Similarly, its gross non-performing assets (NPAs) and net NPAs rose almost three times to 1.56 per cent and 1.35 per cent, respectively, from 0.68 per cent and 0.57 per cent, respectively, in December 2018.

"Given the overall challenging environment, we had a good quarter led by investment banking and wealth management businesses. We have significantly de-grown our wholesale book but retail mortgage presence has increased and we continue to grow that business. The distressed credit team is focused on recoveries," said Vishal Kampani, managing director of JM Financial Group.

He said the investment banking, wealth management and securities business gained traction during the quarter and the pipeline for investment banking transactions continues to remain healthy.

On the spike in bad loans, he said the company has managed to reduce the SMA2 (special mention account-2) numbers from 1.94 per cent of the portfolio to 0.73 per cent. This has mainly been a result of timely asset sales.

As guided earlier, debt-equity and net debt-equity ratios stand at 1.78 and 1.36, respectively, he added.

JM Financial's shares closed 5.36 per cent higher to Rs 107.20 apiece on the BSE, against the Sensex's gain of 0.66 per cent after four successive days of steep fall.