Unmindful of the recent report of Reserve Bank of India, in their Financial Stability Report, that NBFCs reported a decline in growth, ten of the NBFCs, showed over 18% growth in their Loan books as against a growth of 15% in the 9 Private Sector Banks. Let us see the special features of such growth:
- There is a universal decline in profitability during the FY 2017, by 2.9% whereas these NBFCs have shown a growth.
- Micro Finance and AGri linked players have had a bad performance, due to Demonetization whereas these NBFCs have shown a growth of 18%.
- Another notable thing is that 9 private sector banks and 12 public sector banks have released their annual reports, which shows a cumulative loan growth of 15% and 3.6% respectively during FY 2017.
- The result is that the total earnings of these NBFCs numbered have increased more than half, with their return ratios remaining quite stable.
- The productivity part shows that the profitability per employee has grown by 28% whereas the pay pockets of the executives have also gone up by 20% than the previous FY which exceeds that of some of the private bank players.
This results in what?
- This shows that NBFCs continue to strive for a more share of Credit Demand
- These players have been able to perform well in terms of market returns and the overall valuations they command.
KUDOS NBFCs….KEEP IT UP!!!!