FY 17 has been a year of structural policy changes and financial reforms. Even thoughthese reforms and changes were perceived as hurdles by some sections India has managed toovercome them with optimism. The country is also moving towards complete technologicalinclusion. This demands an environment in which the transition to digital initiativesempowers our customers to be future ready which at Chola has been the prime focus in2016 17.
I am happy to inform you that despite the mid-year temporary slowdown in demand due todemonetization we have managed to perform well in FY 17. The Profit After Tax (PAT) forthe year is 719 cr a growth of 26% over the last financial year. Our total assets grew by15% and disbursements grew by 13% over FY 16. Total Asset Under Management (AUM) for theyear are
36984 cr. Net Income Margin (NIM) is at 8.6% for the year driven by reduction in costof funds & increase in fee and other income. We also introduced GNPA recognition at 90days which is ahead of one year as per RBI regulation. On the branch expansion front 169new branches have been opened across the country in FY 17.
The vehicle finance business disbursed 14471 cr during the year a growth of 17%. TheProfit Before Tax (PBT) grew 23% to 682 cr. Despite the temporary slowdown duringdemonetisation in Q3 FY17 the Vehicle Finance (VF) business has posted a healthy growthtrajectory. New initiatives like Third party logistics & Trip loans Dealer Plus forUsed business and Vishesh Cards have been the focus in FY 17.
Home Equity disbursement for the year was 3056 cr and AUM stood at 9593 cr. The yearstarted with a positive note with a healthy disbursement growth which was in line withCRISIL research estimated market growth of 21-23% for FY17. However this growth wasimpacted in the second half due to demonitization & lower economic activity. Thebusiness continued to expand its footprint by adding 14 more branches to bring the totalto 123.
The Home Loans business has been growing at a steady pace and disbursed 325 cr whichis a growth of 86% over FY 16. The business now operates out of 90 branches 45 branchesadded during this year. With the Government extending the Credit Linked Subsidy schemeunder the Housing for All (Pradhan Mantri Awas Yojana) and addition of the middle incomecategory to the economically weaker section (EWS) and lower income group (LIG) we expectthis business to witness a growth spurt. The Corporate Finance division rallied behindMSME loans & ended the year with an AUM of 379 cr.
Rural financing which was launched in FY 15 to service the financial needs of thefarming community disbursed 73 cr in FY 17. The prime focus of this division is to fundprocurement for farming inputs.
Our subsidiaries Cholamandalam Distribution Services Limited (CDSL) CholamandalamSecurities Limited (CSEC) and White Data Systems India Private Limited (WDSI) togethermade a PBT of 6.86 Cr in FY 17 as against 8.23 Cr in FY 16.
Several initiatives in the Vehicle Finance business aim at increasing the market sharefor our core products CV & Used Vehicles and also Car MUV TW 3W Tractor & CE.Effort remains on increasing fee insurance and other income and maintaining branch levelprofitability and use of technology to increase efficiency & productivity. The HomeLoan Home Equity & SME business will focus on sourcing through new digitalinitiatives while maintaining a strong intermediary/broken engagement. We shall continueto invest in training & development of talent from within the organization.
ICRA has revised its outlook from AA/stable to AA/positive on our long-term debtinstruments. Brickwork ratings assigned BWR AA+ (Stable) rating for the proposed NCDissuance of the Company.
I would like to thank all our stakeholders for their continued faith & support.Chola continues to focus on empowering customers to be future ready through innovation andbuilding bridges that make business easy and profitable for all stakeholders.
Do share your ideas and feedback with me firstname.lastname@example.org andjoin us to be ready to take on the future!