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Cholamandalam DBS posted Rs. 5.90 crores of Profit before exceptional items and Tax, for the half year ended 30th Sept 2008.
Board approves infusion of Capital up to Rs.500 crores |
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Chennai, October 24, 2008 |
Cholamandalam DBS Finance Limited, a joint
venture between Murugappa group and DBS
Bank, posted a profit before exceptional
items and tax of Rs. 5.90 crores, for the
Half Year ended 30th September 2008, and Rs.
3.77 crores in the Second Quarter ended 30th
September 2008. The company also registered
a total disbursement of Rs.2222 crore for
the half year ended 30th September 2008 and
a growth in managed assets of around 50% to
over Rs.8800 crores.
The business profits declined due to lesser
than planned disbursements, higher cost of
short term borrowings and on account of
higher provisioning and losses in the small
ticket consumer finance business which
constitutes 8% of the overall managed assets
of the Company. During the quarter, the
company exited out of the small ticket
consumer finance business and closed down 50
of its branches.
The company has already put in place a
series of measures to contain the fall out
by restructuring costs and tightening credit
policies. The impact of these measures will
be felt in the quarters ahead.
Other major businesses, such as Vehicle
finance, Home Equity Loans and Business
finance continue to demonstrate superior
portfolio performance and profitability. The
Vehicle Finance business grew its Managed
assets by 22% and operating profits by 48%
during the current half year, as compared to
same period last year. The Home equity
business expanded its distribution to 21
locations from 11 and increased its Managed
assets by over 475% and disbursements by
297% as compared to the same period last
year. However, the losses in the consumer
finance business significantly affected the
company's profitability.
At the Board meeting held today, the Board
has approved further infusion of Capital
into the company, up to Rs. 500 Crores, in
order to augment the long term Capital
requirements of the company. |
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