SKS Microfinance posts Rs 330 cr loss

SKS Microfinance, the country's only listed microlender, has suffered a loss Rs 330 crore in the quarter ended March 31, 2012, due to heavy provisioning and write-offs.

The company allotted Rs 278 crore under provisions and write-offs in the fourth quarter of FY'12 and 1,173.5 crore for the whole fiscal due to non-collection of Andhra Pradesh dues.

SKS Microfinance CFO S Dilli Raj said that total Andhra Pradesh portfolio has been reduced to Rs 236 crore from Rs 1,496 crore after the Microfinance Act was implemented in the state in 2010.

"Income has also gone down because of the reduction in the AP portfolio. We expect 25 per cent growth in revenue in the first quarter of the current fiscal," Dilli Raj said.

Total income stood at Rs 66.15 crore in the January-March quarter, against Rs 175 crore in the same period last fiscal, SKS said in a statement.

The company suffered a loss of Rs 1,361 crore for 2011-12 fiscal. It had a profit of Rs 111.63 crore in the previous financial year.

On further provisioning and write-offs, Dilli Raj said the Reserve Bank has given time up to five quarters to make provisioning and the microlender will take a call at later stage.

"Post the draw-down of Rs 1,000 crore in Q4, which is 2.4 times larger than the sum of Rs 417 crore obtained during nine months ended March 2011, the funding concerns are behind us," Dilli Raj said.

"With a cash and cash equivalent of Rs 669 crore and a capital adequacy of 35.4 per cent, our non-AP portfolio will grow quarter on quarter from now on. Also, the rated and unrated pool assignments of Rs 908 crore bring in concomitant capital relief of Rs 136 crore," he added.

The net tax deferred asset amounting Rs 460 crore as on March 31 has not been recognised. The said sum of Rs 460 crore will be available to offset tax on future taxable income, SKS said.

Shares of the company closed down 1.35 per cent at Rs 94.70 on the BSE.

SKS was the worst hit after Andhra Pradesh, which once considered microfinance capital of the country, witnessed a spate of suicides by borrowers two years ago allegedly due to the coercive recovery practices by some MFI agents.

The situation prompted the state government to come out with AP Microfinance Act which crippled the activities of MFIs.

Source: Financial Express