The bank had earned a net profit of Rs 26 crore in the corresponding period last year.
The net interest margin for the quarter was at 6.55% as compared with 7.97% in the year ago period.
The provision and contingencies for the quarter stood at Rs 612 crore, more than double of year-ago period’s Rs 305 crore.
“We decided to take a one time hit upfront and created a management buffer in provisions against standard assets rather than allowing the stress to affect the profitability in the next two quarters,” Equitas managing director PN Vasudevan told ET.
“There are signs of improvement in repayment and we expect microfinance collection efficiency is expected to be back to almost normal level by the fourth quarter,” he said.Its microfinance business contributed 10% of the gross loan portfolio.The bank made additional standard asset provision of Rs 185 crore in microfinance and Rs 145 crore additional bad loan provision due to change in provisioning norms.
Its pre-provision operating profit for the quarter under review also stood lower at Rs 315 crore against Rs 340 crore in the year ago period. Net interest income was lower at Rs 786 crore against Rs 802 crore while other income was higher at Rs 286 crore against Rs 192 crore.
The lender’s gross non performing assets ratio was at 2.82% at the end of June, up from 2.67% a year back. The net NPA ratio was at 0.95% against 0.81%.
Its gross advances grew at 8% year-on-year to Rs 37,610 crore, even as the microfinance book shrank 45%.
“We are targeting 15-16% growth in the fiscal which would be supported by about 20% expansion in non-microfinance business,” Vasudevan said.
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