FY13 will be year of consolidation: Manappuram Finance

Gold loan financing company Manappuram Finance has reported a better than expected growth of 83.3% year-on-year in its net profit of Rs 187 crore for the fourth quarter of financial year 2011-12.

In an interview with CNBC-TV18, I Unnikrishnan, Managing Director of Manappuram General Finance attributed fall in gold loan disbursements to the increasing interest rates in the commercial paper(CP) segment in the last one year. This led the company to repay around Rs 1500 crore for CP.
"This year will be a year of consolidation for us, thanks to a lot of regulatory measures in the form of LCV Cap and current controls on banks' exposure to NBFCs, especially older NBFCs etc," he said.
He further added that the RBI constituted committee, which will look into aspects like LTV (loan-to-value) will help give more clarity on the LTV and other control. Also read:   Reduce exposure to NBFCs giving gold loans: RBI to banks Below is the edited transcript of the interview on CNBC-TV18. Also watch the accompanying video. Q: Your numbers are good but gold loan disbursements have fallen. Can you take us through why that may have happened?
A: In the last quarter, there were some disturbances in the CP (Commercial Paper) market. We had to repay a lot of our CP, which amounted roughly around Rs 1500 crore. We had to scale down our disbursement. Q: How much of a recovery do you expect to see through the course of FY13? Do you have a target set for gold loan disbursement?
A: This year will be a year of consolidation for us, thanks to a lot of regulatory measures in the form of LCV Cap and current controls on banks' exposure to NBFCs, especially older NBFCs etc. Q: There has been a small increase on net NPAs as well on a percentage basis. Is there any stress that you are facing on that front?
A: No. That is more on account of the reduction in the disbursement during the last quarter. Q: How do you expect FY13 to pan out when loans come up for renewal or repayment? What kind of pressures do you see given the new regulatory environment?
A: We may not see any growth during the first quarter anyway. About the other quarter, I will be able to give an idea may be after 2-3 months. Q: Any further clarifications you are seeking from the RBI (Reserve Bank of India) in terms of the new modalities that have been set out? Are you confident of getting to the capital adequacy ratio they have asked for by 2014?
A: One good thing is that the RBI constituted a committee under K.U.B Rao which will look into all these aspects including the LTV (loan-to-value). We believe that the committee will complete the report in July or so and there will be more clarity on the LTV and other control.