Financial Results For The Quarter Ended December 31, 2018
Press Release
January 25, 2019
Financial Results For The Quarter Ended December 31, 2018
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Corporate office |
GRUH FINANCE LTD.
GRUH FINANCE POSTS 16% GROWTH IN PROFIT AFTER TAX FOR THE NINE MONTHS ENDED DECEMBER 31, 2018
The Board of Directors of GRUH Finance Ltd. (GRUH) – a subsidiary of HDFC Ltd. – has approved the accounts for the quarter ended December 31, 2018 at their meeting held in Mumbai on January 25, 2019.
FINANCIAL RESULTS
Profit after tax for the year amounted to 317.23 crores as compared to 274.12 crores for the previous year, an increase of 16%.
Highlights of Operational Performance
Highlights of Operational Performance
( in crore)
| Particulars | Dec 31, 2018 | Dec 31, 2017 | Growth (%) |
|---|---|---|---|
| Net Interest Margin | 499.88 | 479.29 | 4 |
| Non-Interest Expenses | 88.27 | 77.40 | 14 |
| Profit After Tax | 317.23 | 274.12 | 16 |
| Loan Assets | 16,851.86 | 14,774.66 | 14 |
| Yield on Loans | 11.31 | 11.39 | |
| Cost of Borrowings | 8.23 | 7.71 | |
| Spread | 3.08 | 3.68 | |
| Cost to Income Ratio | 16.17 | 14.84 | |
| Credit Costs to Loan Assets | 0.28 | 0.28 | |
| Net Interest Margin to ATA | 3.94 | 4.47 | |
| Return On Assets | 2.50 | 2.55 | |
| Return On Equity | 25.42 | 28.80 | |
| Non-Interest Exp. to ATA | 0.70 | 0.72 | |
| Loan to Assets | 83 | 98 |
* ATA – Average Total Assets
Loan Portfolio
The loan portfolio as at December 31, 2018 amounted to 16,852 croresas against 14,775 crores in the previous year – an increase of 14%.
LENDING OPERATIONS
Loan Disbursements
Loan disbursements during the year were 3,603 crores as against 3,748 crores in the previous year.
Looking to the liquidity position in the market, GRUH consciously adopted a conservative approach to disbursements and carried excess liquidity. Such approach resulted in a negative carry, adversely affecting the Net Interest Margin. However the spread on the loans continue to be sustained at 300+ bps.
Cumulative loan disbursements as of December 31, 2018 were 32,059 crores.
Provisions for Expected Credit Losses
As per requirement of Ind AS 109 on “Financial Instruments”, provision for credit losses are to be carried in the Balance Sheet based on expected credit losses. Accordingly, as per Ind AS 109, GRUH is required to carry provisions of 46.81 crores towards expected future credit losses which is 0.28% on Loan Assets of 16,852 crores. Against that, GRUH is actually carrying a provision of 129.03 crores as on December 31, 2018.
As per the NHB guidelines, GRUH is required to carry a provision of 67.08 crores on Standard Assets and 32.53 crores on NPAs. Thus the provisions carried by GRUH are in excess of the provision required as per the NHB guidelines also to the extent of 29.42 crores.
As per NHB guidelines, Gross Non Performing Assets (NPA) at 146.46 crore constitute 0.87% of the total loan portfolio as on December 31, 2018 as against 0.73% in the previous year. The Net NPA as per NHB guidelines are 0.50%.
Liquidity Position
As on December 31, 2018, GRUH carried an aggregate of 2,896 crores by way of unencumbered liquid deposits and investments in Liquid Mutual Funds besides unavailed term loan sanctions from Banks to the tune of 750 crores.
MERGER
The Board of Directors of GRUH Finance Limited has approved the merger of GRUH into Bandhan Bank. The merger would be subject to regulatory and shareholder approvals. The share exchange ratio accepted by the boards of Bandhan Bank and GRUH is 568 equity shares of face value of 10 each of Bandhan Bank to be issued for every 1,000 equity shares of face value of 2 each of GRUH.
DEPOSITS
GRUH’s deposit portfolio is 1,621 crores, has grown from 1,401 crores last year. GRUH’s Fixed Deposit programme has been rated “FAAA” by CRISIL and “MAAA@” by ICRA. The rating of “FAAA” and “MAAA@” indicates ‘Highest Safety” as regards repayment of interest and principal. GRUH’s Commercial Paper (CP) is rated at “A1(+)” by CRISIL and ICRA and Non-Convertible Debenture (NCD) is rated at “AAA@” by ICRA and “AAA” by CRISIL.
RETAIL NETWORK
GRUH has a network of 195 retail offices across 11 states of the country. GRUH has 48 offices in Gujarat, 51 offices in Maharashtra, 17 offices in Karnataka, 33 offices in Madhya Pradesh, 13 offices in Rajasthan, 12 offices in Chhattisgarh, 12 offices in Tamil Nadu, 5 in Uttar Pradesh, one office each in Bihar and Jharkhand and 2 in West Bengal.
January 25, 2019
