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Aug 10, 2012, 06.13 PM IST
Nirmal Jain, Chairman of IIFL said its brokerage income came down by 15% in the first quarter while its distribution income fell 48%. Seasonally, Q1 is weak and therefore, the company could not post good numbers, he added.
IIFL reported a consolidated net profit of Rs 52 crore against Rs 47 crore quarter-on-quarter. The company's consolidated income stood at Rs 581 crore versus Rs 632 crore QoQ.
Nirmal Jain, Chairman of IIFL said its brokerage income came down by 15% in the first quarter while its distribution income fell 48%. Seasonally, Q1 is weak and therefore, the company could not post good numbers, he added. IIFL's gold loan business growth too has slowed down, informed Jain.
Further, to curtail losses the company has scaled down broking operations and shut down some branches.
Here is the edited transcript of the interview on CNBC-TV18.
Q: Take us through income generation, which segment showed promise and enabled you to earn at all because there is a downtick as far as the income generation is concerned compared to the previous quarter?
A: On QoQ basis, the brokerage income is down by 15% which is again in line with the market because market volumes were down, particularly the cash market volumes. We have a distribution and marketing income which primarily comprises of distribution of life insurance products, which is the larger chunk along with mutual fund and other products. That is also down 48% on a QoQ basis but, YoY its up 15%.
I think 15% is more sustainable growth that we are seeing in this kind of businesses but, this business is seasonal and the first quarter of a financial year is typically a slag quarter. Life insurances and these businesses pick up later in the second half and peak out in the last quarter of the financial year as people invest for tax planning and plan the entire years savings.
But, we have seen growth in financing income which is our consumer finance or NBFC business. There is about 4-5% growth QoQ but, YoY it is more than double and that is how the income split is.
Q: In the consumer financing business any experience in any kind of slippages or any worries on that front?
A: Our asset quality has been consistently high. Our gross NPAs are 0.54% on an aggregate book basis and net NPAs are around 0.38%. This has been consistently so in the last 5-6 years.
Our NPAs have always been less than 1%, which is a fairly healthy book. As far as our book is concerned, it is primarily retail oriented with very tight risk management and credit appraisal policy. At this point in time, we don't see any stress in asset quality as such.
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