L&T Finance Holdings reported consolidated net profit growth of 49 percent at Rs 309 crore for the first quarter ended June, 2017 driven by higher advances that clipped at 96.4 percent and better asset quality.
In an interview to CNBC-TV18, Dinanath Dubhashi, MD & CEO, L&T Finance Holding said the first strategy was to grow in each of the three-focused lending businesses - wholesale, rural and housing sector, which has worked and that focus will continue.
The second strategy was to see a rapid decline in de-focused business. The third and fourth strategies were increase in fee income and controlling expenses. All the strategies have been in line for the past five quarters, said Dubhashi.
He said the non-lending businesses that is wealth and mutual fund also showed excellent growth.
It was the fifth consecutive successful quarter for the financial services arm of the engineering major L&T, after many quarters of headwinds wherein it has been improving its return on equity (RoE), for which it has set a target of 18-20 percent by 2020, said a PTI report.
He said the bank has also increase provision coverage and put a strong risk framework in place to enable us to accelerate and modify strategy to aid profitability and growth.
For this year the dominant focus is on Infrastructure finance and tractor finance and both showed robust growth in Q1. “We are back 11 percent market share and to number two position in tractor finance market,” he added.
Therefore, overall the disbursement growth has been 95 percent and the loan book growth has been 22 percent along with good fee-income growth and flat expenses in the quarter gone by led to 49 percent profit after tax growth.
He said de-focused business is currently around Rs 2,300 crore and expect it to reduce to Rs 1000 crore by end-FY18.
The loan growth for the year would be between 20-25 percent.
Moreover, any reduction in interest rates would be passed on to the customers, said Dubhashi.
For the entire discussion, watch video
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
