Kolkata: Microfinance company Fusion Finance reported its fourth quarterly loss in a row due to the ongoing severe asset quality stress that the sector is suffering from.
The lender's net loss stood at Rs 165 crore for the fourth quarter of FY25, as compared with a net profit of Rs 133 crore in the year-ago period, owing to higher provisions to cover bad loans. It set aside Rs 255 crore during the quarter as compared with Rs 119 crore earlier.
Pre-provision operating profit for the quarter under review stood 69% lower at Rs 90 crore against Rs 291 crore in the year-ago period.
Net interest margin was at 8.57% as compared with 11.59% over the same period. Its interest income at Rs 4,449 crore was 22% lower year-on-year, in line with squeezed business volume.
Fusion had reported a net loss of Rs 36 crore in the first quarter, Rs 305 crore in the second quarter and Rs 719 crore in the third quarter of FY25. Provision was the highest during the third quarter at Rs 572 crore.
Consequently, Fusion's annual net loss stood at Rs 1,225 crore as compared with Rs 505 crore net profit in the preceding fiscal.
The company breached various financial covenants in respect of borrowings amounting to Rs 4,763 crore as of March 31, 2025. Therefore, these borrowings become repayable on demand. The company has obtained extension from its lenders for these breaches for borrowings of Rs 4,080 crore. It is in discussion with the remaining lenders to obtain similar extensions, the company management said in a regulatory filing to the stock exchanges.
The company holds cash and cash equivalents and liquid assets aggregating Rs 798 crore.
"The company remains committed to improving recovery efforts at the field level and is confident of achieving better outcomes. Any subsequent recoveries will be recognised as income and credited to the statement of profit and loss in the period of recovery," managing director Devesh Sachdev said.
The lender's gross non-performing assets ratio stood at 7.92% at the end of March against 2.89% a year back. Gross NPA was at 12.6% at the end of December 2024. The ratio came down sequentially due to accelerated write-off of bad loans to the tune of Rs 405 crore during the quarter.
Fusion's assets under management dipped 22% year-on-year to Rs 8,980 crore at the end of FY25 from Rs 11,476 crore as it slowed disbursal to prevent further worsening of asset quality.
Its capital adequacy ratio stood at 22.4%, well above the regulatory stipulation.
The lender's net loss stood at Rs 165 crore for the fourth quarter of FY25, as compared with a net profit of Rs 133 crore in the year-ago period, owing to higher provisions to cover bad loans. It set aside Rs 255 crore during the quarter as compared with Rs 119 crore earlier.
Pre-provision operating profit for the quarter under review stood 69% lower at Rs 90 crore against Rs 291 crore in the year-ago period.
Net interest margin was at 8.57% as compared with 11.59% over the same period. Its interest income at Rs 4,449 crore was 22% lower year-on-year, in line with squeezed business volume.
Fusion had reported a net loss of Rs 36 crore in the first quarter, Rs 305 crore in the second quarter and Rs 719 crore in the third quarter of FY25. Provision was the highest during the third quarter at Rs 572 crore.
Consequently, Fusion's annual net loss stood at Rs 1,225 crore as compared with Rs 505 crore net profit in the preceding fiscal.
The company breached various financial covenants in respect of borrowings amounting to Rs 4,763 crore as of March 31, 2025. Therefore, these borrowings become repayable on demand. The company has obtained extension from its lenders for these breaches for borrowings of Rs 4,080 crore. It is in discussion with the remaining lenders to obtain similar extensions, the company management said in a regulatory filing to the stock exchanges.
The company holds cash and cash equivalents and liquid assets aggregating Rs 798 crore.
"The company remains committed to improving recovery efforts at the field level and is confident of achieving better outcomes. Any subsequent recoveries will be recognised as income and credited to the statement of profit and loss in the period of recovery," managing director Devesh Sachdev said.
The lender's gross non-performing assets ratio stood at 7.92% at the end of March against 2.89% a year back. Gross NPA was at 12.6% at the end of December 2024. The ratio came down sequentially due to accelerated write-off of bad loans to the tune of Rs 405 crore during the quarter.
Fusion's assets under management dipped 22% year-on-year to Rs 8,980 crore at the end of FY25 from Rs 11,476 crore as it slowed disbursal to prevent further worsening of asset quality.
Its capital adequacy ratio stood at 22.4%, well above the regulatory stipulation.
You may also like
Expert reveals how women are getting so easily embroiled in drug smuggling offences
J&K DGP reviews security arrangements ahead of Amarnath Yatra 2025
Boris Johnson welcomes surprise new baby with wife Carrie
Amitabh Bachchan Did Not Even Want To Shoot “Kajra Re”, Reveals Shaad Ali
BREAKING: Lando Norris smashes Monaco GP record to deny Charles Leclerc pole
