In an interview to CNBC-TV18, HK Raghavan, President-Inclusive & Outreach Banking at Equitas Holdings spoke about the results and his outlook for the company.
Below is the verbatim transcript of the interview.
Sonia: What disappointed the street was the way disbursements have fallen this time. It is a fall of 32 percent year-on-year and even sequentially there has been a slip. Take us through what went wrong and what would the expectations be next quarter?
A: If you look at the performance metrics for the quarter, many metrics, many factors have been positive, for example if you look at the used commercial vehicle, we have grown by 30 percent YoY and the micro LAP which is funding the small entrepreneurs, below Rs 5 lakh which is a secured loan, has grown by 50 percent and the non-performing assets (NPAs) of these two particular products have been quite steady and under control and have not deteriorated at all. During this particular quarter also, as we became bank, we introduced three new products which is the business loans, agriculture loans and loan against gold which are aligned with the banking space and within a matter of three months, we were able to kind of create a portfolio close to Rs 100 crore and they have found good traction.
In terms of net interest margins (NIMs), if you look at it, it has grown by 30 percent to Rs 221 crore and the overall portfolio has grown by 17 percent. We think these are all positives as far as this particular quarter is concerned but if you come to look at microfinance portfolio, as you are aware - post demonetisation there were close to 20 districts and these districts were completely impacted on the repayments. Out of which seven districts, where Equitas operates, also got impacted and those districts have not seen any positive traction as far as repayments are concerned. So in terms of disbursements in these districts and the states, the disbursement has been, as a matter of caution, Equitas has been disbursing only for the second cycle loans which is only about 40 percent of the total disbursements that takes place.
The situation at the ground level has to improve a lot and only when it improves we think the microfinance product can see attraction but otherwise the positives even if you look at the branches, liability branches, we have put up 284 branches and we have got deposits of Rs 1,900 crore which is about 30 percent to the total borrowings and 17 percent has been current account and saving account (CASA).
For entire interview, watch accompanying video.
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