Jun 06, 2012, 08.02 PM IST

EGGC net soars 163% to Rs 225 cr in FY12

State-owned credit insurer Export Credit Guarantee Corporation (ECGC) today reported a 163% jump in net profit at Rs 225.21 crore for FY12, primarily on low base-effect.The state-owned credit insurer, which serves both banks and exporters, had a post-tax profit of Rs 85.66 crore in FY11 due to weak global conditions

Source: PTI

Share . Email . Print . A+

State-owned credit insurer Export Credit Guarantee Corporation (ECGC) today reported a 163% jump in net profit at Rs 225.21 crore for FY12, primarily on low base-effect. The state-owned credit insurer, which serves both banks and exporters, had a post-tax profit of Rs 85.66 crore in FY11 due to weak global conditions.

ECGC chairman and managing director N Shankar said with the jump in profit, the company's net profit is now back to pre-crisis levels and he is hopeful to maintain it in the current fiscal despite gloomy global economic conditions.

The rise in profit was supported by a jump in premium, that rose to Rs 766.25 crore in FY12 from Rs 674.86 crore in FY11, and a drop in claims to Rs 679.61 crore in fiscal 2011-12 from 757.44 crore in FY11.

Set up in 1957 by the Centre to promote exports, ECGC, the fifth largest export credit insurer in the world in terms of national export coverage, is targeting a 10% rise in premium in FY13, a senior company official told reporters.

Asked if the company fears for a rise in claims if economic conditions in the developed world - which constitutes a major chunk of India's exports - worsen, ECGC executive director Geetha Muralidhar said it is hard to predict, but asserted the insurer is ready to face any eventuality.

As a precaution, it has placed Greece in a list of countries identified as "restricted" for cover at par with others facing volatilities on the economic and political fronts like Egypt and Algeria.

"During the ongoing fiscal, ECGC, which already enjoys a healthy solvency ratio of 10.1 vis-a-vis the prescribed 1.5, is expecting a Rs 100-crore capital infusion from the government as announced in the Budget," Shankar said.

The company will open three new branches to take its total network to 55 across the country during the year, he added. ECGC, which gets around 65% of its business from banks by guaranteeing export credit, will start a special internal department this fiscal to focus on recoveries, said Shankar.

In FY12, engineering goods topped the sectoral chart when it came to risk of the value covered with a 21% share, while the US, the largest export market for the country, was at the top among the geographies with a 32% share.

Asked about the sectors in which he foresees difficulty, Shankar pointed out that the agri-commodities sector is witnessing some stress.