CreditAccess reports 8% increase in Q3 net; Board approves modified exchange ratio for Madura Micro Finance buy

Bengaluru-headquartered CreditAccess Grameen Ltd on Wednesday reported a 8 per cent increase in net profit at ₹108 crore in the third quarter ended December 31, 2019 against ₹100 crore in the year-ago quarter.

The Bengaluru-headquartered microfinance institution’s net interest income (difference between interest income and interest expended) was up 28 per cent year-on-year (y-o-y) at ₹301 crore (₹235 crore).

Net interest margin (Net interest income less processing fees, interest on deposits, income from direct assignment plus finance lease charges/average quarterly on-book loans) declined to 12.4 per cent in the reporting quarter from 13.2 per cent in the year ago quarter.

Loan disbursements during the quarter jumped 69 per cent y-o-y (or by ₹2,977 crore vis-a-vis ₹1,762 in the year ago quarter). Gross loan portfolio (GLP), comprising group lending and retail finance, rose 46 per cent yoy to ₹8,872 crore (₹6,085 crore). Group lending comprises 95 per cent of the GLP and the rest is accounted for by retail finance.

Udaya Kumar Hebbar, Managing Director and CEO, said “Gross loan portfolio increased by 45.8 per cent y-o-y to ₹8,872 crore driven by 22.5 per cent growth in our borrower base to 27.7 lakh borrowers. Disbursements grew by 68.9 per cent to ₹2,977 crore.

“We have opened 258 branches during the ninemonths in FY20 reaching to 928 branches with total employees of 10,465. We believe that our expanded branch network and manpower will provide further strong growth in fourth quarter and next financial year.”

Madura Micro acquisition

CreditAccess Grameen Ltd’s Board on Wednesday approved a modification to the earlier announced share exchange ratio for the amalgamation, entailing acquisition of 76.34 per cent share capital of Madura Micro Finance Ltd (MMFL) from its existing shareholders.

The company, in a regulatory filing, said it will issue and allot 157 fully paid-up equity shares of face value ₹10 each in the company (as against the earlier number of 158 shares) for every 100 fully paid-up equity shares of face value ₹10 each of MMFL.

“The parties have agreed that the price at which the company will acquire the aforementioned shares of MMFL will be at ₹1,208 per share, aggregating to ₹869 crore,” the filing said.