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Power Finance Corp Ltd (PFC), India’s state-owned lender to power projects, has posted a 46% jump in net profit for the financial year ended March on the back of higher loan disbursements.
The company recorded a net profit of Rs 4,420 crore in 2012-13, compared with Rs 3,032 crore the year before.
“Our loan disbursements increased 13% from Rs 39,818 crore in 2011-12 to Rs 45,151 crore last financial year leading to the growth in profit. Profitability was also helped by a 64-basis-point increase in lending rate,” PFC chairman Satnam Singh said. The company’s loan assets grew 23% from Rs 1.3 lakh crore at the end of March 2012 to Rs 1.6 lakh crore last financial year.
Total income of PFC also jumped 32% from Rs 13,037 crore in 2011-12 to Rs 17,273 crore last financial year. The company’s spread -- difference between lending rate and borrowing cost -- increased 62 basis points to 2.87% during the year.
The non-banking finance company (NBFC) mobilised Rs 40,407 crore during the financial year through bonds and medium and short-term loans. Its networth grew 15% from Rs 19,493 crore at the end of March 2012 to Rs 22,351 crore in March this year. Singh also informed that PFC’s gross non-performing assets (NPAs), as a percentage of gross assets, came down to 0.71% as on March 31, compared with 1.04% a year ago.
For the quarter ended March, the company posted a 58% jump in net profit at Rs 1,294 crore. Total income grew 27% to Rs 4,670 crore during the period. Spread during the three months increased 66 basis points to 2.99% and interest income grew 40% to Rs 1,726 crore.
Banking foray
PFC chairman Singh also announced that the company was looking at picking up an equity stake in a public sector bank.
“PFC is exploring the possibility of acquiring a stake in one of the public sector banks. The proposal is with the power ministry and the finance ministry. They are currently examining it,” Singh said. He refused to share details but said the “substantial” stake should allow PFC to add a board in that bank.
Sources said the company was eyeing a 26% stake or even more, in any one of these five banks--Punjab and Sind Bank, Indian Bank, Central Bank of India, Bank of Maharashtra and the Union Bank of India. The finance ministry is understood to be discussing the proposal with the Reserve Bank of India (RBI).
The proposal comes at a time when many companies, including NBFCs like PFC, are mulling applying for banking licences. RBI had issued the much-awaited final guidelines on new banking licences in February this year.
PFC's stock today closed at Rs 190.85, down 2.15%, on BSE, while the benchmark Sensex gained 0.34% to 20,215.40.
