IFCI Ltd’s rough patch continued in the June quarter with the State-owned non-banking finance company recording a net loss of ₹110 crore, as higher non-performing loan provisioning weighed on bottomline.

This bottomline performance followed a net loss of ₹101 crore reported in previous quarter ended March 31, 2016.

IFCI had reported a net profit of ₹101 crore in the April-June period last year.

Total income from operations for the quarter under review declined to ₹822 crore (₹886 crore).

Three-account drag Commenting on the first quarter performance, Malay Mukherjee, Managing Director and CEO, said the bottomline performance was weighed down by higher provisioning on slippage of some large-value accounts.

Slippages in three accounts — two of infrastructure companies and one from the automobile industry — were the main reasons for the pain during the quarter under review.

Of the total NPA provisioning of ₹387 crore for the quarter under review, as much as ₹275 crore related to these three accounts, Mukherjee said. The NPA provisioning for the June quarter last fiscal stood at ₹130 crore.

‘Unexpected slippages’ “These three accounts going bad was unexpected. Had these three accounts not slipped, I would have had a different performance story to tell you today,” Mukherjee told a press conference after the Board meeting.

In the case of a Hyderabad-based infrastructure company, which formed part of the three companies, IFCI opted for accelerated provisioning and provided ₹170 crore. The aggregate provisioning in respect of the other two large accounts (a diversified infrastructure player and automobile industry) stood at ₹105 crore.

‘Still manageable’ Despite the worsened non performing asset situation, Mukherjee maintained that things have not gone out of control and asset quality was in “manageable” position.

While gross NPA as a percentage of advances stood at 19.1 per cent, net NPAs stood at 13.1 per cent as on end June this year.

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