Bharat Financial posts Rs234.91 crore loss in March quarter, weighs merger

Bharat Financial’s provisions hit Rs334.6 crore during the March quarter against Rs3.8 crore a year ago


Bharat Financial’s gross NPAs during the March quarter jumped to 6% from 0.06% in the previous quarter.
Bharat Financial’s gross NPAs during the March quarter jumped to 6% from 0.06% in the previous quarter.

Mumbai: Higher bad loans and heavy provisioning pushed small loan provider Bharat Financial Inclusion Ltd into deep losses in the March quarter, even as loan growth slowed.

Provisions hit Rs334.6 crore during the quarter against Rs3.8 crore a year ago, and the company recorded a loss of Rs234.91 crore during the quarter, against a Rs84.46 crore profit a year ago.

The cash-dominated and politically sensitive microfinance industry was hit badly during demonetisation, resulting in low repayment rates.

Gross loan portfolio (GLP) growth slowed to 7% in the fourth quarter, compared to a 38% increase in the December quarter. GLP figures at the end of March quarter stood at Rs9,150 crore compared to Rs8,531 crore in the previous quarter.

Gross non-performing assets (NPAs) during the March quarter jumped to 6% from 0.06% in the previous quarter. Net NPAs stood at 2.7% in the March quarter compared to 0.03% in the previous quarter. Total collections during the post-demonetization period till 25 April stood at 96.7%.

“Affected geographies accounted for the bulk of the provisions and they will take more time to recover. As things start to smooth out, we expect our portfolio to grow at 50% for the coming year,” Ashish Damani, chief financial officer of Bharat Financial Inclusion said.

In a notification to stock exchange on Monday, the company said its managing director and chief executive officer have been authorized to appoint consultants, advisers or bankers to evaluate the various options like strategic alliance, merger with a bank or acquisition of a financial institution.

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