Satin Creditcare Q2 profit surges over three-fold as asset quality improves

Its pre-operating consolidated profit grew 53% year-on-year at Rs 324 crore against Rs 212 crore. The lower microfinance provisions at Rs 83 crore against Rs 133 crore earlier helped the company report a higher net profit.

The Gurugram-headquartered lender grew consolidated business by 31% year-on- year to Rs 16589 crore at the end of the second quarter. Out of this, the standalone microfinance business grew 23% to Rs 13608 crore while the gross non-performing assets ratio improved to 1.9% fro 3.5% a year prior.

"A combination of reduction in credit cost, growth in portfolio, a slight dip in expenses and 65 basis point drop in marginal cost of borrowing helped the profit numbers," Satin chairman HP Singh told ET.

The company also highlighted improvement in collection efficiency across buckets, leading to better portfolio at risk ratios. Nevertheless, it kept aside Rs 50 crore as management overlay as a future buffer.

Last couple of years, the microfinance market faced severe asset quality stress leading to losses for most lenders.