CreditAccess Grameen on Tuesday reported a 25 per cent decline in its consolidated net profit to Rs 59.7 crore in the quarter ended September 2021, due to higher provisioning requirements on bad loans.
The Bengaluru-based microfinance lender had posted a net profit of Rs 79.6 crore in the September 2020 quarter. However, it was higher by 195 per cent when compared with a net profit of Rs 20.3 crore in the June 2021 quarter.
Its total income increased 7.2 per cent to Rs 618.6 crore. Net interest income (NII) jumped 11.5 per cent year-on-year to Rs 368.9 crore from Rs 330.9 crore, CreditAccess Grameen said in a statement.
"Impairment of financial instruments increased from Rs 90.2 crore to Rs 139.9 crore," it said.
Prudential approach was taken by aligning Madura Micro Finance Ltd's (MMFL) provisioning policy with CA Grameen, recognising gross non-performing assets (GNPA) at 60+ dpd (days past due) compared to 90+ dpd earlier, it said.
This led to higher provisions by Rs 13.4 crore. The total ECL (expected credit loss) provisions were Rs 742.9 crore (5.90 per cent of loan portfolio), against a GNPA (gross NPA) of 7.67 per cent. The company's write-offs stood at Rs 129.6 crore during the quarter.
CreditAccess had acquired MMFL in 2019.
The disbursements grew 21.6 per cent from a year ago to Rs 1,372 crore as of September 30, 2021.
"The signs of a significant rebound in the rural economy during Q2FY22 augur well for our company, as we were able to disburse Rs 3,890 crore and contribute to the rural capital creation story across the country.
"Our consolidated portfolio grew 19.2 per cent year-on-year to Rs 13,333 crore. Collection efficiency consistently improved to 93.3 per cent at CA Grameen and 87 per cent at MMFL in September 2021," Udaya Kumar Hebbar, MD and CEO of CreditAccess Grameen, said.
The microlender opened 121 branches during the quarter, primarily in the newer markets like Uttar Pradesh, Bihar, Chhattisgarh, Gujarat, Jharkhand and Rajasthan.
As part of the completion of the process integration with MMFL, the company has aligned MMFL's provisioning policy with CA Grameen, recognising GNPA at 60+ dpd compared with 90+ dpd, he said.
"While this led to higher provisioning during the second quarter, we considered this at an appropriate time given that all the process, policies and operating model have been integrated," Hebbar added.
Shares of CreditAccess Grameen on Tuesday closed at Rs 620.05 apiece on the BSE, down 1.44 per cent from the previous close.
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