JM Financial net declines 26.5 per cent to ₹93.6 cr on additional Covid-19 provisioning

JM Financial Group on Thursday reported a 26.5 per cent decline in its consolidated net income to ₹93.61 crore for the June 2020 quarter, impacted by coronavirus-driven disruptions in its businesses as well as higher additional provisions.

The company had posted a net profit of ₹127.29 crore in the corresponding quarter of the previous financial year.

The nationwide lockdown has adversely impacted its revenue, which declined 19.32 per cent to ₹691.11 crore in the quarter, which, for most businesses, was a washout.

The profit was hit as the company has made an enhanced provision of ₹66 crore towards the pandemic in the quarter.

The lockdown resulted in loan book coming down by almost a third to ₹10,833 crore in June 2020 from ₹13,926 crore in June 2019, the company said.

While gross non-performing assets (NPAs) doubled to 1.80 per cent from 0.90 per cent, net NPAs increased from 0.80 per cent to 1.22 per cent in the reporting quarter. However, the special mention account-2 (SMA2) numbers improved to 1.82 per cent of the portfolio from 2.10 per cent. But, it did not disclose the percentage of its borrowe₹ who have opted for the moratorium.

“We have made additional gross provisions of ₹ 66 crore on account of the uncertainties around the pandemic for the quarter, taking the total provisions to ₹241 crore on account of the pandemic,” said Vishal Kampani, managing director of JM Financial Group.

Kampani said that despite the pandemic headwinds, the company is maintaining higher liquidity buffers and healthy leverage ratios. Cash and cash equivalent stood at ₹3,394 crore with a net debt-equity ratio of 0.79 as of the June quarter.

Its wealth management business assets rose to ₹47,579 crore from ₹ 43,038 crore in June 2019 and ₹44,883 crore in March 2020.

.

JM Financial’s shares shed 2.35 per cent at ₹ 77.20 on the BSE,