Cholamandalam DBS Finance Ltd – H1 Performance
– Profit Before Tax and Exceptional Items at Rs 1043 L

 

Chennai, October 28, 2009: For the quarter ended 30.9.09, aggregate disbursements were at Rs.873 Crs as against Rs. 605 Crs in Q2 of 2008-09 (Disbursements of 2008-09 included disbursements of Rs 160 crs in Personal Loan segment and nil in 2009-10) On a like to like basis,   the aggregate disbursement of Rs.873 Crs is higher by 96% over disbursement of Rs.445 Crs made during the quarter ended 30.9.08. All the secured lines of businesses, Vehicle finance, Home Equity Loans and Business finance continue to demonstrate superior portfolio performance and profitability.

The strong initiatives taken by the company to rationalize branches and to reduce costs have yielded results. Aggregate expenditure for the quarter was significantly lower at Rs.89 Crs as against Rs.139 Crs in Q2 of 08-09. Excluding Provisions and Loss Losses, expenditure for the Quarter was lower by 38% and for the half year by 46% over the corresponding period of last year.

Significant efforts to collect the Consumer loan receivables helped contain loan losses / delinquencies in the consumer finance business which impacted the company’s overall profitability.

Profit before tax and Exceptional items was at Rs 5.36 crores as against the loss of Rs 17.77 crores reported for the corresponding quarter of the previous year.

Performance for the Half year ended 30.9.09:

  • Disbursement on a comparable basis excluding consumer loans were Rs.1575 Crs compared to Rs.1393 Crs. for the corresponding period last year. The Vehicle Finance business grew its assets by 30%; the Home equity business increased its assets by 25%, during the current half year as compared to the same period last year.

  • Other operating income was higher at Rs.45 Crs.

  • Aggregate expenditure for the half year ended including provisions was Rs.181.14 Crs as against Rs. 313.27 crores for the corresponding period last year.

  • Profit before tax and exceptional items were significantly higher at Rs.10.43 Crs as compared to a loss of Rs.12.51 Crs reported for the corresponding period last year.

Exceptional item – Sale of Mutual Fund Business:

  • The company has entered into a binding agreement with Larsen & Toubro Finance Ltd for the sale of the Mutual Fund business, subject to necessary statutory approvals. Pending completion of the sale, the likely loss for impairment on the transaction aggregating to Rs.43 Crores has been provided for.

Performance of Subsidiaries:

Significant cost cutting and rationalization of business lines / locations enabled both the subsidiaries DBS Cholamandalam Securities and DBS Cholamandalam Distribution report a turnaround in their performance and come back to profits.

Performance of subsidiaries for the half year ended 30.9.09 are as follows:

Rs. Crs

DCSec

DCDL

30.9.09

30.9.08

30.9.09

30.9.08

Total Income

7.54

8.69

4.90

5.98

Total Expance

5.61

13.96

2.35

12.82

Profit/(Loss) before Tax

1.93

-5.27

2.55

-6.84

Tax

1.08

1.78

0.05

Profit/(Loss) after Tax

0.85

-7.05

2.55

-6.89

Tier II capital Infusion:

During the quarter the company infused Tier II capital of Rs.100 Crs into the business and Capital adequacy as on 30.9.09 stood at 15.82%.

About Cholamandalam DBS Finance Limited

Cholamandalam Investment & Finance Company Limited (CIFCL) was incorporated in 1978 as the financial services arm of the Murugappa Group.  In 2005, post the joint venture partnership between the Murugappa Group and DBS Bank Limited, Singapore, the Company was renamed asCholamandalam DBS Finance Limited (CDFL). The Company that commenced business as an equipment financing company has now emerged as a comprehensive financial services solution provider that offers vehicle finance, business finance, home equity loans, mutual funds, stock broking and distribution of financial products to its customers. The Company operates from over 140 branches across India with an asset under management of about Rs.8546 Crores. The subsidiaries of Cholamandalam DBS includes DBS Cholamandalam Securities Limited (DCsec) and DBS Cholamandalam Distribution Limited (DCDL).

About Murugappa Group: Headquartered in Chennai, the Rs. 15,907 crores (USD 3.14 billion) Murugappa Group is one of India’s leading business conglomerates. Market leaders in diverse areas of business including Engineering, Abrasives, Finance, General Insurance, Cycles, Sugar, Farm Inputs, Fertilizers, Plantations, Bio-products and Nutraceuticals, its 29 companies have manufacturing facilities spread across 13 states in India. The organization fosters an environment of professionalism and has a workforce of over 32,000 employees. The Group has forged strong joint venture alliances with leading international companies like DBS Bank, Mitsui Sumitomo, Foskor, Cargill and Groupe Chimique Tunisien has consolidated its status as one of the fastest growing diversified business houses in India.

About DBS

DBS Bank Ltd. Singapore is a 100% subsidiary of DBS Group Holdings Ltd. DBS is one of the largest financial services groups in Asia with operations in 16 markets. Headquartered in Singapore, DBS’ “AA-” and “Aa1” credit ratings are among the highest in the Asia-Pacific region.

As a bank that specialises in Asia, DBS leverages its deep understanding of the region, local culture and insights to serve and build lasting relationships with its clients. DBS provides the full range of services in corporate, SME, consumer and wholesale banking activities across Asia and the Middle East. The bank is committed to expanding its pan- Asia franchise by leveraging its growing presence in mainland China, Hong Kong and Taiwan to intermediate the increasing trade and investment flows between these markets. Likewise, DBS is focused on extending its end-to-end services to facilitate capital within fast-growing countries in Indonesia and India.

DBS acknowledges the passion, commitment and can-do spirit in each of its 15,000 staff, representing over 30 nationalities. For more information, please visitwww.dbs.com.

For further information, please contact:
N Srinivasan
Director-Finance
Murugappa group
Tel:25306212Mob: 98408-87710

 

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