The Hindu Business Line : DBS nominees on board — Chola DBS aims to diversify portfolio

CHOLAMANDALAM DBS Finance Ltd, which is how Cholamandalam Finance and Investment Company will be renamed, aims to diversify its portfolio with the support of the new collaborators, DBS Bank of Singapore.

Two products were specifically mentioned at a press conference here today — personal loans and loans against property. The Chennai-based Murugappa group today announced the formal entry of DBS Bank into the board of Cholamandalam, consequent to the Singapore bank having acquired 37.5 per cent stake in the company.

The board of Cholamandalam was reconstituted today. The new board comprises nine members, with three members each from the Murugappa group and DBS and three independent directors. Mr M.A. Alagappan will continue to be the Chairman of the company.

The new board met to consider the results for the quarter ended December 2005.

The company has reported a dip in its net profit for the quarter to Rs 6.20 crore from Rs 7.78 crore in the same period last year. This, it was explained, was due to the slowdown in the commercial vehicles segment. About 82 per cent of Cholamandalam's loan book of Rs 2,210 crore is made up of loans to commercial vehicles. In the first nine months of the current year, Cholamandalam's net profit increased to Rs 30.08 crore from Rs 25.80 crore in the corresponding period last year. Advances increased 17 per cent, or by Rs 930 crore during period, over the corresponding period last year.

A footnote to the statement of results says that Cholamandalam sold its long term investment of 1.55 crore shares of Cholamandalam MS General Insurance Company, "at book value."