IFCI reports Q4 loss of Rs 101 crore as NPA provision hiked

Infrastructure financier IFCI Ltd has reported a net loss of Rs101 crore for the three months ended 31 March against a net profit of Rs120 crore in the corresponding January-March quarter of the previous fiscal.

IFCI had to make higher provisioning for bad loans as four of its major loan assets, particularly in the power sector, turned non-performing.

"This has happened primarily because of one particular large account in the power sector. As per RBI norm, we had to provide additional amount including the interest reversal. So if you look at the fourth quarter, that one account has taken hit of Rs 188 crore," chief executive officer and managing director Malay Mukherjee told reporters.

"Barring for some slippages in the telecom sector, where the company had to provide around Rs90 crore, in the infrastructure sector we had to make some provisions," he said.

"There is also one very larger exporter of textile where company provided for provision of textile. So all this put together made to the loss," Mukherjee said.

IFCI's provisioning for bad loans and contingencies increased by Rs321.77 crore from a year ago to Rs484.35 crore for the last quarter of 2015-16.

Total income of the company for the quarter ended 31 March 2016, however, increased to Rs1,023.72 crore from Rs886.39 crore in the same quarter a year ago. The company's asset quality also deteriorated during the quarter.

For the full fiscal 2015-16, the company posted a net profit of Rs 337.45 crore against a profit of Rs521.60 crore in 2014-15.

"Total income has increased to Rs 4,006.64 crore for the year ended March from Rs 3,46.08 crore year ago," it said.

Going forward, after June, the company would be able to do better, Mukherjee said.

"Gross non-performing assets and net NPAs as of 31 March have increased to 13.05 per cent and 9.54 per cent, respectively, vis-a-vis 10.28 per cent and 7.18 per cent, respectively, as of March 2015, because of the downgrading of 15 standard accounts for 2015-16 (Rs1,585 crore), including seven cases in fourth quarter of the fiscal (Rs1,128 crore)," the company said.

IFCI said it would now be better focused towards reducing bad loans.

"Internally, we have decided to reduce the 100 per cent of the NPAs that we have added in the last one year and 10 per cent of the previous NPAs," Mukherjee added.

The board of directors of IFCI at its meeting announced an interim dividend of 10 per cent, or Re1 per share, for 2015-16.