Q2 Concall highlights:
(MD Girish Kousgi, CFO Prashanth Joishy and DGM Shreekant M Bhandinad answered the questions)
NIM 3.2%, Cost of funding 7.95%, Yield 10.23%, Spread 2.28%
DER 8.91, Capital Adequacy Ratio 18.82
Opex slightly high due to new employees, salary increase, CSR spend
Asset quality:
- GNPA 0.79%, NNPA 0.58 slightly higher compared to Q1
- SENP segment contributed in higher NPAs but repossessed assets close to 26 crs in Q1/Q2 and expecting NPA to go down in coming quarters due to recovery
- NPA for salaried 0.47, SENP 1.57. CanFin’s SENP NPA levels are best in industry
- Branches does light underwriting of loans and collection. For above certain threshold values CPCs are used
- PCR 35% comfortable with this level due to expected good recovery
Growth
- Disbursements are flat in H1 as we are cautious due to stress from builders side
- Demand growth coming back in Karnataka, Hyderabad and AP
- Expecting decent growth in the coming quarters with stable asset quality as few competitors stopped/reduced lending
- Focus will be on Tier 2/3/4 cities where competition is less from banks
Capital, Liabilities:
- Have unitized credit lines of 2200 crs
- Will raise retail deposits going forward
- NCD borrowings cost is slightly higher vs banks so didn’t raise any NCDs in the recent
- Bank borrowings are from various banks and Canara bank is not the largest lender so there won’t be any impact of Canara bank’s stake sale
- Capital raising will be decided at later point of time
89% home loans, LAP 4% Plots 1% & other loans 6% - most of these non home loans are given to existing home loan customers after having good repayment history
Disclosure: Holding - Do not recommend buy or sell. Not an investment advisor and Investors are advised to do their own due diligence.