Fusion Finance Q1 Results: Microfinance company reports Rs 36 crore loss versus profit a year ago

economictimes.indiatimes.com:

The lender's credit cost, which signals the share of provisions as a percentage of on-book loan portfolio, jumped to 3.38% for the quarter under review against 0.88% a year back. Its gross non-performing assets ratio rose to 5.46% at the end of June from 3.2% a year back.

The lenders stopped disbursing loans in 104 branches out of some 1400 to prevent further slide in asset quality while it tightened the new customer acquisition criteria.

«We noticed delinquency trends in certain pockets due to over-leverage and external factors. Due to which we have done early risk recognition and tightened our ECL (expected credit loss) model leading to higher than usual provisioning in this quarter that had an impact on our overall profitability,» Fusion managing director Devesh Sachdev said.

The lender's pre-provisioning operating profit, however, stood 26.5% higher year-on-year at Rs 298 crore, backed by 25.5% expansion in assets under management to Rs 12193 crore leading to a 28% rise in total income at Rs 707 crore.

Its net interest margin (NIM) jumped to 11.64% for the quarter against 10.89% a year back.

«We expect to go back to our normal course in the second half of the fiscal year,» Sachdev said.