CreditAccess Grameen Q2 profit quadruples to Rs 502 crore

CreditAccess Grameen reported second-quarter net profit of Rs 502 crore, nearly four times the Rs 126 crore recorded a year earlier, according to Economic Times Markets on October 22. Higher income and lower expenses, including a smaller provision for credit risk, supported the lender’s earnings.

Total income rose 26% year-on-year to Rs 1,905 crore from Rs 1,509 crore. Expenses declined to Rs 1,234 crore from Rs 1,340 crore, with credit-risk provisions falling to Rs 299 crore from Rs 526 crore.

Better asset quality lifts return guidance

The gross non-performing assets ratio stood at 1.79% at the end of September, down from 4.06% a year earlier. The improvement accompanied higher profitability projections from the microfinance lender.

CreditAccess Grameen raised its return on assets guidance to 5.2–5.8%, replacing its earlier range of 4.0–4.8%. It also increased its return on equity guidance to 21–24% from 16–20%. These ranges are management projections, not realised returns.

Loan growth continues, with caution in drought-hit districts

Assets under management increased 19.5% year-on-year to Rs 30,946 crore. Management guided for annual AUM growth of 20–25% and credit costs of 3–4%.

Managing director Ganesh Narayanan said the lender would remain cautious in districts facing drought-related difficulties while serving established customers’ growing borrowing needs and increasing new customer acquisition.

The company also reduced loan pricing by 50 basis points, equivalent to half a percentage point, from October.