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M&M Finance’s Q4 net profit falls 9.5% YoY; ₹6.30 per share dividend declared
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
Mahindra & Mahindra Financial Services was scheduled to report its results for the March quarter earlier but was deferred due to a fraud at one of the company’s branches in the North East region. The company, in a stock exchange filing, said the fraud has impacted profits for the quarter and year ended March 31, 2024.
Mahindra & Mahindra Financial Services Ltd., the non-bank lender, on Friday reported a net profit for the March quarter at ₹619 crore, which declined 9.5% year-on-year (YoY), compared to ₹684 crore in the same period last year.
The company’s net interest income for the quarter stood at ₹3,706.10 crore, which is higher by 21% YoY.
Loan growth remained strong with total assets increasing 24% YoY to ₹1.02 lakh crore. Disbursements during the quarter under review rose by 11% to ₹15,292 crore.
Sharing its business update for April, the company said its overall disbursement stood at approximately ₹3,930 crore, a growth of 4% on-year.
Its collection efficiency stood at 89% as against 92% YoY.
M&M Finance also recommended a dividend of ₹6.30 per equity share of face value of ₹2 each for the financial year 2024.
This will result in a total payout of 315%, M&M Finance said while announcing its March quarter earnings.
The dividend payout will be subject to the members approval at the forthcoming 34th Annual General Meeting of the company.
M&M Finance was scheduled to report its results for the quarter earlier but was deferred due to a fraud at one of the company’s branches in the North East region.
The company, in a stock exchange filing, said the actual amount involved in the fraud stands at ₹135.86 crore. The fraud has also impacted profits for the quarter and year ended March 31, 2024, M&M Finance said.
Further, it said that its parent has appointed a law firm and an accounting firm to undertake a fact-finding assessment of the aforesaid suspected irregularities.
“Based on the results of the assessment by the accounting firm and the management, 2,887 loan accounts were identified by the management as potentially fraudulent in nature. These loans had an outstanding net recoverable balance of ₹135.86 crore as of 31st March 2024, which have been fully provided,” the statement read.
The fraud pertained to retail vehicle loans disbursed by the company and involved forgery of KYC documents, leading to embezzlement of company funds.
M&M Finance detected the fraud during the January-March quarter and the detection was followed by arrest of the few people involved in the fraud. The people involved included an area business manager and other employees of the concerned branch of the company in the North East.
Shares of Mahindra & Mahindra Finance closed 0.57% higher at ₹266.20 apiece on Friday. The stock of the non-bank lender have had a subdued last 12 months, gaining close to 7% but underperforming most of its peers.
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