Indiabulls Fin net dips 28%

Indiabulls Financial Services has recorded a 27.95 per cent fall in consolidated net profit after tax and minority interest at Rs 133.58 crore for the quarter ended September 2008 compared with Rs 185.42 crore for the corresponding quarter last year. The total income of the company grew by 29.51 per cent at Rs 641.52 crore for the quarter as against Rs 495.33 crore for the same period a year ago.

The company said the figures for the prior year have been regrouped, except for the effect of discontinued operations, pursuant to the demerger of the securities broking and advisory services business (a part of fee income) from Indiabulls Securities and the merger of Indiabulls Credit Services with the company. Since the figures for the current quarter, half year and previous year are after the demerger or merger, the figures are not comparable with those of the 2007-08.

 

For the half year ended September 2008, on a consolidated basis, the company’s net profit after tax and minority interest dropped by 17.18 per cent at Rs 280.40 crore as against Rs 338.59 crore for the same period of 2007. During the quarter, the company has written off Rs 42.5 crore as bad debts. The company said delinquencies and credit costs are mostly driven by small-ticket personal loans, which have been reduced to about 2 per cent of the total book from over 8 per cent a year ago.

The company said it has begun focusing on lower-risk assets and maintaining high levels of liquidity and capital in the business, with Capital to Risk-Weighted Assets Ratio (CRAR) at 27 per cent during the quarter. The company has tightened the credit policy and would continue to churn higher-risk assets. The company has also changed its liability mix from short-term funding to longer- dated term loans. Going forward, the company would increase its focus on fee- generating businesses, especially strategic ventures of insurance, mutual funds and commodities.

The company’s networth stood at Rs 3,777.1 crore at the end of September 2008.