Money & Banking

L&T Finance Q2 profit up 52%

Our Bureau. Mumbai | Updated on October 22, 2020 Published on October 22, 2020

Dinanath Dubhashi, Managing Director & CEO, L&T Finance Holdings

L&T Finance Holdings registered a 52.2 per cent increase in consolidated net profit at ₹265.12 crore in the second quarter of the fiscal against ₹174.2 crore in the same period a year ago.

Its total income, however, fell by 5.5 per cent in the July to September 2020 quarter to ₹3,508.91 crore against ₹3,711.85 crore a year ago.

“With normalcy returning, net interest margins and fees have reached the desired range of 6.5 per cent to seven per cent, despite carrying a negative carry of ₹64 crore on additional liquidity,” L&T Finance Holdings said in a statement on Thursday.

Additional provisions

It further said it has made additional provisions of ₹512 crore in the second quarter of the fiscal to strengthen the balance sheet, even though there is strong on-ground recovery. It carries ₹1,757 crore of provisions on account of macro prudential provisions, Covid-19 and accelerated Expected Credit Losses (ECL) provisions on stage 1 and 2 assets, which are over and above the ECL model on GS3 and Stage 1 and 2 assets.

Its total lending book fell marginally by one per cent to ₹98,823 crore in the second quarter this fiscal versus ₹1,00,258 crore in the same period a year ago.

Dinanath Dubhashi, Managing Director and CEO, LTFH, said: “As anticipated, the second quarter saw a revival in the rural economy, which we believe will also drive the economic growth of the country for the next few quarters. In the second quarter, our rural business witnessed significant growth momentum backed by our market leading position and strong digital and data analytics infrastructure for the lending business.”

LTFH said it saw excellent revival seen in rural and renewable sector and gained market share to become the leader in farm equipment financing for the second quarter. There was also significant business momentum in farm equipment, two-wheeler and renewable finance, along with moderate pick-up of disbursements in micro loan and home loan.

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Published on October 22, 2020
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