See bounceback in loan growth by September: Shriram Transport Finance1 min read . Updated: 04 Aug 2021, 05:04 PM IST
- The company expects loan disbursements to pick up to the third quarter levels by the next quarter
MUMBAI : Shriram Transport Finance is expecting loan growth to bounce back by September after having reported a strong first quarter performance. The disbursements by the largest commercial vehicle financier stood at ₹12,730 crore, down just 15% quarter-on-quarter, aided by a strong pipeline. The company expects loan disbursements to pick up to the third quarter levels by the next quarter.
“July numbers were quite good compared with June. Normally, July is not a peak month. We feel August and September, where normally the pick-up for new vehicle sale happens, should be good. Government spending is decent. The infra projects are going on a timely basis. With all this we should be able to do quite well. I think vehicle sales will also be good and our customers will upgrade to new vehicles. Used vehicle demand is very good and we expect vehicle demand also to pick up. September will be a good month," said Umesh Revankar, managing director and chief executive officer, Shriram Transport Finance.
Shriram Transport Finance had reported a 47% decline in consolidated net profit at ₹170 crore for the June quarter due to accelerated provisions against expected credit loss. The company had registered a net profit of ₹320 crore in the same quarter a year ago. Compared sequentially, the net was down by 77.5% from ₹755 crore in the March 2021 quarter. The company saw a 7% year-on-year growth in assets under management driven by a 13% growth in used commercial vehicle business.
Revankar also said that the company is relooking at a potential merger with Shriram City Union Finance (SCUF), and added that it may not necessarily be a three-way merger as planned initially. SCUF is the consumer financing subsidiary of Shriram Capital.
“We had kept this in the cold storage for last two years because of uncertainty in the market. We have started looking at it. There is no progress. By September we will be able to make some decision," he added.
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