Non-bank financing company Shriram Transport Finance Company (STFC) on Monday reported a 6.47 per cent decline in standalone profit after tax at Rs 680.62 crore in the quarter ended December 2021 even as its net interest income increased by 11.16 per cent.
The company had reported a profit after tax of Rs 727.72 crore in the same period of the previous year.
STFC Vice Chairman and Managing Director Umesh Revankar attributed the fall in profit to the revised prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to advances issued in November last year, which led to higher NPAs (Non Performing Assets).
“With RBI coming out with clarification on NPA classification, there was a change in the accounting method during the quarter,” he said.
Net interest income grew by 11.16 per cent to Rs 2,387.97 crore in the latest quarter under review as against Rs 2,148.22 crore in the year-ago period.
Gross stage 3 assets stood at 8.40 per cent as against 7.11 per cent. Revankar said had it not been for the RBI norms, gross stage 3 assets would have been 80 basis points lower at 7.62 per cent.
Net stage 3 assets were at 4.36 per cent as against 4.31 per cent in the year-ago period.
The asset financing company has implemented resolution plans (Resolution 1.0 and Resolution 2.0) to relieve pandemic-related stress on 39,410 borrower accounts amounting to Rs 11,52.82 crore.
Out of the above, 3,308 borrower accounts with advance amount of Rs 68.75 crore have been settled. The balance outstanding as on December 31, 2021 of 36,102 borrower accounts was Rs 9,96.52 crore, out of which 2.30 per cent was in more than 90 days past due bucket.
Revankar said the restructured book is performing well and there is no stress due the third wave of COVID.
Liquidity coverage ratio was 164.99 per cent as on December 31, 2021.
Its assets under management grew by 8.41 per cent to Rs 1,24,601.77 crore as compared to Rs 1,14,932.06 crore.
The company’s scrip ended at Rs 1,154.6 apiece, down 3.78 per cent on BSE.