NBFC Profits may Surpass Pre-Covid Levels as loans Grow

Non-bank lending, a financing-industry segment hit the hardest by Covid, is set for a smart recovery matching pre-pandemic profit performance due to improved asset quality. Domestic rating agency ICRA said NBFCs could see a 40-basis point improvement in bad loan numbers, reflecting faster growth in assets under management, moderation in asset quality indicators and con- trolled credit costs.

One basis point is 0.01%. ICRA has also revised the growth out- look for non-banks to 10-12% for the cur- rent fiscal year. Within this, retail non-banks are expected to expand at 12-14% while housing finance companies could expand at 10-12%.

The rating agency said that the growth will be broad-based across various sub-sectors with microfinance and personal loans at the vanguard of the expansionary trend. Vehicle financing loans that include commercial vehicles and pas- 45 senger vehicles, which had seen significantly subdued growth since 2020, are also expected to rebound.-S-ET

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