Marginal NPA rise; to consolidate this year: Manappuram Fin

Manappuram Finance has not seen any significant increase in non-performing assets. It stands at around 1.56 percent this quarter, says I Unnikrishnan, Executive Director, Manappuram Finance.

Net interest margin reported by the company in Q1 is also flat at 11 percent against Q4 of previous year.

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Unnikrishnan says this year will be a year of consolidation for Manappuram Finance and hence he does not expect any significant change in net interest income. The company has reported a 30 percent fall in net interest income (NII) to Rs 287 crore.

Below is the verbatim transcript of I Unnikrishnan’s interview on CNBC-TV18

Q: Can you take us through what is the extent of bad debts you have, how much was the NPL or defaults?

A: NPL asset is around 1.56 percent. This was around 1.10 percent as of March. So there is no significant increase in NPA.

Q: The extent of interest write back that you had to do, is that over and done with?

A: In a last quarter, we had a set of loans where we had identified certain requirement. That impact is fully over. Starting this quarter, we have slightly changed a method and in effect there is an additional hit of Rs 46 crore.

Q: Can you give us more details what have the net interest margin (NIMs) been in this quarter compared to the 11 percent that you saw in Q4?

A: For the last quarter’s interest reversal there is no change in the net interest margin. It is holding around 11 percent. So there is no significant change in that.

Q: What about net interest income (NII) that has fallen by 30 percent to Rs 287 crore, will you be able to maintain this kind of a net interest income at least of around Rs 280 crore?

A: We hope to maintain this level because this year is going to be a year of consolidation for us. So we would not expect any significant change in the number which we have reported for the quarter.

Q: What about AUMs, what have they been this quarter, in FY13 itself you saw a degrowth or fall in AUMs by about 14 percent, what has it been this quarter and going ahead what will the run rate look like?

A: This quarter’s AUM is Rs 9,160 crore which was Rs 9,946 crore as of March. Going forward, we will be consolidating at this level and we should be seeing growth starting from Q4.