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THIRUVANANTHAPURAM, JUNE 25
Kerala Financial Corporation (KFC) has registered a growth of 46 per cent in net profit to Rs 8.3 crore in 2017-18 on the back of substantial growth in terms of sanctions and recovery. Despite a challenging economic environment, sanctions registered a growth of 87.88 per cent over the previous year to Rs 724 crore, a spokesman for the company said.
FOCUSED STRATEGY
Disbursements were at Rs 600 crore (-8.4 per cent), while total recoveries rose to Rs 945 crore (Rs 874.28 crore). The company posted an operating profit of Rs 20.19 crore during the year. “With a focused strategy in place, we will be targeting new business of Rs 1,500 crore in the present year," said Sanjeev Kaushik, Chairman and Managing Director, KFC.
Sustained growth in sanctions should help it double its loan portfolio in the next three years. This year, KFC plans to source further low-cost funds after going for a credit-rating. With sector-leading financial strength in hand and low NPA levels, it expects to attract an upgraded rating this year, which would enable it to enhance its competiveness, Kaushik added.
A leading industrial finance institution, KFC has already brought down gross NPAs to 6.37 per cent and net NPAs to 2.03 per cent, which Kaushik said makes for an industry leading performance.
SETTELEMENT CAMPAIGN
KFC had recently conducted settlement campaigns through adalats with a view to bringing down gross NPAs below four per cent at the year-end. "Once the NPAs are brought down to this level, it can approach RBI for permission to raise low-cost deposits and funds as well," Kaushik explained.
The capital to risk-weighted assets ratio (CRAR) stood at 17.26 per cent, well above the minimum of nine per cent prescribed by the RBI. “KFC has emerged the best performing amongst state financial corporations in terms of profitability and contained level of NPA”, Kaushik observed.
INTEREST RATE REVAMP
The corporation recently brought down its interest rate structure from the existing prime lending rate of 14.5 per cent to a competitive base rate of 9.5 per cent. The company had recently revamped its credit policy to streamline the process of sanctions and disbursement and complete it in a time-bound manner.
To ensure that financial assistance is judiciously provided, appraisal systems have been strengthened by centralising the process at the zonal offices. The corporation will focus on selecting credit-worthy projects, appraising their business prospects comprehensively and disbursing the loans in a milestone- related methodology.
"Continuous monitoring of assets will be rigorously done in order to maintain the quality of loan assets," Kaushik said.
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