SKS Microfinance today reported a 38 per cent fall in third-quarter net profit at Rs 34.1 crore, compared to Rs 55.4 crore in the corresponding period last year. Revenues increased 44.5 per cent to Rs 385 crore from Rs 266.2 crore.
Expenditure increased over two-fold to Rs 240.6 crore from Rs 106.5 crore.
The total provisioning and write-off for the third quarter stood at Rs 100.7 crore, including an additional provisioning of Rs 27 crore, following the recommendations of the Malegam Committee that recently submitted its report on the microfinance sector.
According to the recommendations, a microfinance company is required to maintain at all times an aggregate provision for loan losses whichever is higher of three — one per cent of the outstanding loan portfolio or 50 per cent of the aggregate loan installments, which are overdue for more than 90 days and less than 180 days, or 100 per cent of the aggregate loan instalments which are overdue for 180 days.
Andhra Pradesh (AP), which brought in the Andhra Pradesh Micro Finance Institutions (Regulation of Money Lending) Act in December, accounted for more than half (Rs 58.74 crore) of the total Rs 100.75-crore provisioning and write-offs.
In a filing to the Bombay Stock Exchange (BSE), the company said it would continue to assess the adequacy of provision on the AP loan portfolio, including assigned loans, due to the evolving environment following the Act and the resultant impact on field operations, and also based on the outcome of the legal suit pending before the Andhra Pradesh High Court challenging the Act.
Earnings per share during the quarter dropped to Rs 4.7 against Rs 10.6 a year earlier. Its share today closed 1.03 per cent down at Rs 684.1 on the BSE.