L&T Finance reported a healthy 18 percent growth in loans and advances along with a 23 percent growth in profits for the full year. Speaking about the second straight quarter of positive performance, YM Deosthalee, CMD, L&T Finance said focus on B2C products (tractors, 2-wheeler finance, microfinance and housing finance) and emphasis on operating projects in renewable power and road segment have been key to this growth.
Speaking to CNBC-TV18, he said the situation in terms of resolution has not changed. 'Unless we see growth in public expenditure, resolution will take long time."
He sees growth in retail business because of the change in public sector lending norms. "We are carrying extra provision of Rs 200 crore. The profits are not going to be impacted," he said.
Below is the verbatim transcript.
On Restructuring:This quarter the restructuring, there were two assets which were restructured and there were two assets which came back. So, net-net there has not been any major slippage in this quarter at all. What happened is that two assets became standard and two became restructured. The overall amount of slippage was around Rs 200 crore and a similar amount was recouped and became standard.On Banks:All those banks who have declared results, private sector banks particularly, I don\\'t think that there has been a serious deterioration in the gross non-performing assets (NPAs) over there. We will have to wait and watch what is happening in other non-banking financial companies (NBFCs) as well as in the case of public sector banks. However, I can only tell you only generally that the situation on the ground in terms of resolution has not substantially changed and therefore unless the activity level picks up, unless we see growth in the economy and unless we see that the public spending -- expenditure, new contracts being awarded, that happens, the regulations are going to take longer time.On Collections:
Collection efficiency in the retail business was extraordinarily good in this quarter. We have had very healthy collections in the retail business. Secondly, there has been resolution of some of the cases in the mid-corporate segment and we could collect money from some of the small and medium enterprises as well as from the commercial vehicle and commercial construction equipment business. So these were old cases which got resolved and we could recollect money.On Retail:Due to the change in the norms, the gross NPA level in the rural, particularly the retail business, will go up. It is difficult for one to imagine that when you change from 180 days to 150 days, the numbers will remain the same. Given the fact that we have made prudential provisions, we are carrying in our books more than Rs 200 crore of extra provision. We do not believe that because of the increase in the gross NPA, the profit and loss account or the profits are going to be impacted.
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