Will maintain NIMs around 10.7% level: Manappuram

Unnikrishnan says this year was better than FY13 with profit going up by 8 percent and quality of bad loans also under control.

Going forward, we think yield will be around 21-22 percent levels.

I Unnikrishnan

ED

Manappuram Fin

Gold financing company  Manappuram Finance hopes to maintain its net interest margins (NIMs) at current levels of around 10.7 percent, says ED I Unnikrishnan.

The company's net profit dropped 54.4 percent quarter-on-quarter to Rs 32.4 crore in the quarter ended March 2014. However, Unnikrishnan says this year was better than FY13 with profit going up by 8 percent and quality of bad loans also under control.

Below are excerpts from the interview:

Q: You have given a fairly decent performance in the fourth quarter. How have you performed on the bad loan front? Is that completely out of the way now?

A: This year was better compared to FY13 with profit going up by around 8 percent and the quality of loans is also under control. When we look at the non-performing asset (NPA) of around 1.2 percent, 80 percent are those loans, which have all accounts with interest rates fully corrected.

Q: Going ahead, what could be the gross NPAs for Manappuram because this time your gross non-performing loans (NPLs) came in at 1.2 percent, which means it went up on a quarter-on-quarter basis, do you expect this minor pressure to continue?

A: In gold loan where the interest rates corrected, we report those loans as NPA. These are all technical NPAs which were reported as NPAs under regulatory norms.

Q: What about the profit, while year-on-year it looks better, quarter-on-quarter your profit has more than halved? How will you perform in the current quarter and in the first half of the current year?

A: We have seen some contradictory pressure on the yield that has resulted in 2 percent drop in the yield. Going forward, we think that yield will be around 21-22 percent levels.

Q: Can you give us an update on your NIMs, this time they came in at 10.7 percent. What do you expect to see in terms of NIMs going ahead?

A: We should be able to maintain NIM at current level.

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