IFCI slips into red
Low income and higher provisions have dented the earnings of infrastructure sector lender IFCI.
- Published 9.09.18
Calcutta: Low income and higher provisions have dented the earnings of infrastructure sector lender IFCI.
IFCI on Saturday reported a standalone net loss of Rs 340.77 crore for the April-June quarter against a net profit of Rs 277.05 crore a year ago.
Total income of the company declined to Rs 673 crore in the first quarter of this fiscal, from Rs 907 crore in the same period last year, IFCI said in a filing to the Bombay Stock Exchange.
Total expenses of IFCI in the June quarter rose to Rs 1,191 crore, which include Rs 664 crore for impairment losses on financial assets. Total expense was only Rs 491 crore in the corresponding previous period.
The infrastructure sector financer said it was a lender in various cases that had been referred to the National Company Law Tribunal for resolution and had to make provisions during the quarter according to the norms specified by the Reserve Bank of India.
"In terms of clarification received by the company from the RBI, vide a letter dated March 6, 2018, the company was classifying its loan accounts, including NCLT cases and was calculating provisions required under extant norm," the company said in its filing.
"For the quarter ended June 30, 2018, the company has classified these accounts but has made provisions against bad and doubtful assets based on the calculated expected credit loss (ECL)," said the company in its filing.
As a result of the loss, the earning per share has come down to -Rs 2.01 from Rs 1.67 a year ago.
IFCI managing director E.S. Rao had earlier said the company was expecting to recover about Rs 2,000 crore from resolution of NPAs during the financial year. The net NPAs or bad loans of IFCI were at Rs 5,100 crore at the end of 2017-18.