Note-ban hits Cholamandalam; loan growth slips to 3%, net up

Chennai-based financial services firm Cholamandalam Investment and Finance today reported a 12 per cent growth in net profit at Rs 163 crore in the quarter to December, pulled down by the note-ban disruption that led to lower disbursements and a rise in bad loans.
In the September quarter of this fiscal year, the company's post-tax profit had jumped 42 per cent to Rs 171 crore from Rs 120 crore in the year ago quarter.
"Demonetisation has its effect on the disbursements. There was an impact on all of our portfolios during the quarter," Executive Vice-President and Chief Financial Officer Arul Selvan told PTI in a post-earnings concall from Chennai.

The aggregate disbursals for the third quarter ended December 31 grew only 3 per cent to Rs 4,373 crore from Rs 4,260 crore last year, he said, while adding in the September quarter the same had grown 21 per cent.
The company disbursed Rs 3,491 crore in vehicle finance business as against Rs 3,245 crore last year same period. Home equity disbursements were at Rs 619 crore as against Rs 882 crore.
Net income margin stood at 8.4 per cent for the quarter as against 8.77 per cent last year.

Gross non-performing assets rose to 3.85 per cent from 3.5 per cent in the September quarter.

Selvan said gross NPA numbers are like to be better in the fourth quarter with availability of cash, higher usage of PoS machines and debit cards.
"We expect gross NPA may be below 3.5 per cent in the fourth quarter."
The company made a one-time provision of Rs 28 crore towards estimated VAT liability in respect of sale of repossessed vehicles during the period 2008-2016 in Maharashtra.
The capital adequacy ratio was at 19.21 per cent as against the regulatory requirement of 15 per cent.