MAS Financial Services Limited Results - 3rd Quarter FY 21

- A Robust Financial Performance- 103 Quarters of Consistent Financial PerformanceAHMEDABAD, India, Feb. 11, 2021 /PRNewswire/ -- The Board of Directors of MAS Financial Services Limited (MAS Financial) (BSE: 540749) (NSE: MASFIN), specialized in MSME financing, announced today the unaudited financial results for the Quarter ended 31 December, 2020.

The consistent financial performance during all the past turbulent period is the testimony of the strong fundamentals of the company; which is being followed over two decades.

Commenting on the performance, Mr. Kamlesh Gandhi - Founder, Chairman & Managing Director, MAS Financial, said, ''In light of the current situation, the main focus of the company continues to remain on maintaining:1. Strong capital base.

2. High level of liquidity.

3. The quality of Assets.

4. High provisioning buffers.

5. Constant engagement with all the stakeholders for understanding the evolving situation.

With a Tier-1 capital adequacy ratio of 30.35% and total capital adequacy of 32.61%, sufficient liquidity due to very efficient liability management, stable quality of portfolio of around 1.00% of net stage 3 assets (if the company had classified borrower accounts without the effect of Hon'ble Supreme Court order, net stage 3 assets would have been1.33%) and by creating additional provisioning buffer which stands at 1.66% of on book assets should enable the company to navigate the current unprecedented situation successfully''.

As per IND-ASMAS Financial Services Limited reports Assets under Management (AUM) of INR 5054.66 Crore and profit after tax of INR 106.98 Crore for the 9M ended 31 December 2020 from INR 5960.38 Crore and INR 132.06 Crore respectively for 9M ended 31 December 2019 (Excluding this special COVID provision the PAT stands at INR 133.70 Crore growth of 1.25% over the corresponding period of the previous year)• A contraction of 15.20% in AUM over the corresponding period of the previous year, due to adopting a cautious approach on disbursement while maintaining high Collection efficiency.

• Contraction of 18.99% in PAT over the corresponding period of the previous year due to contraction in AUM and maintaining high level of liquidity due to the current market scenario.

• The total special COVID provision as on 31 December 2020 stood at INR 56.05 Crore for the total on book assets of INR 3381.17 Crores i.e. 1.66 % of the total on book assets with an additional special COVID provision of INR 3.94 Crore during the quarter and INR 35.72 crore during the 9M FY 2021 due to Covid-19.

The profit after tax for quarter ended 31 December 2020 is INR 36.18 Crore – A contraction of 25.16% over the corresponding period of the previous year. (Excluding this special COVID provision the PAT for quarter ended 31 December 2020 stands at INR 39.13 Crore contraction of 19.06% over the corresponding period of the previous year)• The portfolio quality improved at 1.00% net stage 3 assets of AUM as compared to 1.16% in September quarter and 1.06% over the corresponding period of the previous year despite of the prolonged ongoing crisis followed by the unprecedented pandemic situation.

Hon'ble Supreme Court, in a public interest litigation (Gajendra Sharma Vs. Union of India & Anr), vide an interim order dated 3 September 2020, has directed that accounts which were not declared NPA till 31 August 2020 shall not be declared as NPA till further orders. Accordingly, the Company has not classified any accounts which were not NPA as of 31 August 2020, as per RBI norms, as NPA after 31 August 2020.

However, if the Company had classified such borrower accounts as stage 3 assets on 31st December 2020, net stage 3 assets would have been 1.33%.

• The special COVID provisioning is not netted off against assets in any stage and the same stands as additional provisioning.

Performance Highlights:Capital Adequacy Ratio (including Tier II capital) as of 31 December, 2020 stood at 32.61%. The Tier-I capital stood at 30.35%.

(INR in CR)ParticularsQ3'21Q3'20QoQ9M'219M'209Mo9MFY 20Assets Under Management5054.665960.3815.20%↓5054.665960.3815.20%↓5966.28Total Income142.09173.3818.05%↓454.74502.839.56%↓672.72Profit Before Tax48.3864.8725.43%↓142.93181.8021.38%↓228.16Profit After Tax36.1848.3425.16%↓106.98132.0618.99%↓166.55Profit After Tax (Without specialCOVID provision for Covid-19)39.1348.3419.06%↓133.70132.061.25%↑181.77Gross Stage 3 Assets % to AUM1.32%1.29%03 bps↑1.32%1.29%03 bps↑1.42%Net Stage 3 Assets % to AUM1.00%1.06%06 bps↓1.00%1.06%06 bps↓1.14%- Note: The total special COVID provision as on 31 December 2020 stood at INR 56.05 Crore for the total on book assets of INR 3381.17 Crores i.e. 1.66 % of the total on book assets with an additional special COVID provision of INR 3.94 Crore during the quarter and INR 35.72 crore during the 9M FY 21 due to Covid-19. Excluding this special COVID provision, the PAT stands at INR 39.13 Crore contraction of 19.06% over the corresponding period of the previous year(INR in CR)Asset Under Management (AUM)*Dec-20Dec-19YoYMicro-Enterprise loans3033.273669.6517.34%↓SME loans1541.641678.238.14%↓2-Wheeler loans323.31452.4428.54%↓Commercial Vehicle loans156.45160.062.26%↓TOTAL AUM5054.665960.3815.20%↓*Represents underlying assets in each of the category. As on 31 December, 2020 58.26% of the total underlying assets is through various NBFCs.

Amortising the gain on assignment of loans over the tenure of the assets in place of booking it upfront – Further strengthening the fundamentals of the company :For more transparent and fair representation, on derecognisation of financial assets (assignment of loan), the gain has been recognized as deferred revenue i.e. ''Interest Receivable on loan transfer transactions'' (Other Non-Financial Liabilities) in place of Retained earnings which is amortized over the maturity of the financial assets derecognized (assigned loans) in place of recognizing gain upfront through profit & loss statement as made applicable while migrating to IND AS. The necessary adjustments are done accordingly for all the related period ensuring that the assets are recognized at fair value in lines with the IND AS requirement, and the gains would be amortized over the maturity of assets.

For detailed understanding, please visit following web address: https://www.mas.co.in/financial-results.aspx#Note on MAS Rural Housing and Mortgage Finance Limited (Subsidiary)The Board of Directors of MAS Rural Housing and Mortgage Finance Limited in their meeting held on 3rd February 2021 took on record the unaudited Financial Results of the company for quarter ended 31 December, 2020.

As per IND-ASMAS Rural Housing and Mortgage Finance Limited reports Assets under Management (AUM) of INR 277.32 Crore and profit after tax of INR 2.68 Crore for the 9M ended 31 December 2020 from INR 284.05 Crore and INR 2.60 Crore respectively for 9M ended 31 December 2019.

- A contraction of 2.37% in AUM and growth of 3.08% in PAT over the corresponding period of the previous year. The COVID provision stands at INR 2.45 crore i.e. 0.96% of the total on book assets.

The Profit after tax for quarter ended December 20 is INR 0.46 Crore –A growth of 19.72% over corresponding period of the previous yearPerformance Highlights:• The portfolio quality improved despite of the ongoing crisis followed by the unprecedented situation at 0.03% net stage 3 assets of AUM as compared to 0.25% over the corresponding period of the previous year.

However, if the Company had classified borrower accounts without the effect of Hon'ble Supreme Court order (as mentioned above), net stage 3 assets would have been 0.26%.

• Capital Adequacy Ratio (including Tier II capital) as of 31 December 2020 stood at 44.14%. The Tier-I capital stood at 35.65%.

(INR in CR)ParticularsQ3'21Q3'20QoQ9M'219M'209Mo9MFY'20Assets Under Management277.32284.052.37%↓277.32284.052.37%↓286.54Total Income8.609.7311.64%↓26.7029.308.88%↓38.37Profit Before Tax0.600.600.09%↑3.513.471.15%↑2.24Profit After Tax0.460.3819.72%↑2.682.603.08%↑1.72Gross Stage 3 Assets % to AUM0.03%0.34%31 bps↓0.03%0.34%31 bps↓0.34%Net Stage 3 Assets % to AUM0.03%0.25%22 bps↓0.03%0.25%22 bps↓0.25%For and on behalf of the Board of DirectorsKamlesh C. GandhiChairman & Managing Director(DIN - 00044852)About MAS Financial Services LimitedHaving incepted back in 1995, when times were quite different, MAS delivered financing solutions to those who needed it the most. The company is registered as non-banking financial company with the Reserve Bank of India.

With a plethora of retail finance options in its arsenal, MAS is focused on fulfilling the requirements of lower income and middle-income groups of the society. We offer Financial Services for Micro Enterprises Loans, SME Loans, Home Loans, Two Wheeler Loans, Used Car Loans, and Commercial Vehicle Loans to satisfy their varied needs. The focus remains on the vast lower income and middle income groups of the society, spread across urban, semi urban and rural areas, and including formal and informal sector.

 

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