SKS Microfinance Q3 loss jumps to Rs 427 crore

In the October-December quarter of 2010-11, SKS had a net profit of Rs 34 crore.

Updated: Jan 19, 2012, 19:12 PM IST

Mumbai: SKS Microfinance, country's only listed MFI, Thursday reported a net loss of Rs 427 crore for October-December 2011 period -- the highest quarterly loss since the company went public.
In the October-December quarter of 2010-11, SKS had a net profit of Rs 34 crore.
The company has been registering losses for the past four quarters. In the July-September quarter, its net loss stood at Rs 384 crore, while in the April-June period it was Rs 219 crore. The loss was Rs 70 crore in the January-March quarter of the 2010-11 fiscal.
The losses of the company widened over the time mainly on account of falling income and rising provisioning towards bad loans.
During the October-December quarter, total income of the company fell to Rs 83.82 crore, from Rs 384.48 crore in the same period a year ago, the company said in a filing to BSE.
SKS's provisions against bad loans during the quarter rose to Rs 358.66 crore, a three-fold jump from Rs 100.75 crore in the year-ago period, it said.
For the nine months ended December 2011, SKS incurred a net loss of Rs 1,031 crore. It had a profit of Rs 181 crore in the same period last fiscal.
SKS brought the micro finance (MFI) sector into limelight after the company mopped up over Rs 1,650 crore (around USD 350 million) through its initial share sale in July 2010.
The public issue, which attracted huge participation from retail investors, also stoked expectations of more industry players tapping the capital market.
In November last year, founder and chairman of SKS Microfinance Vikram Akula resigned from the board of the company over reported differences with the company board amidst huge losses.
Shares of SKS closed at Rs 93.55, up 0.70 percent on the BSE Thursday.
Micro finance -- the practice of giving small loans to poor people -- have come under intense scrutiny after a string of farmer suicides in the Andhra Pradesh, leading to the creation of an Act to regulate their activities.
The Andhra Pradesh Microfinance Institutions (Regulation of Moneylending) Act, 2010, requires MFIs to declare interest rates upfront and disclose all details relating their borrowers.
The Act has hampered micro finance activity in the state and MFIs that were accused of charging very high interest rates on the loans are now finding it hard to get funds from banks.