Mumbai, May 3 (PTI) Leading non-banking finance company L&T Finance Holdings today said better asset quality and cost rationlaisation boosted its consolidated net by 28 per cent to Rs 406 crore for the three months to March.

For the full year to March, the financial services arm of the engineering giant L&T reported a steep 40 per cent growth in net at Rs 1,459 crore over the previous year.

The company, which has been focusing a lot on the return on equity (RoE) as a key measure for revival since the past two years, said both its March RoE at 15.06 per cent and the full year at 15.03 per cent (up from 12.31 per cent) are ahead of their targets.

"In the year to March our RoE jumped by 272 basis points. This was due to the robust growth, focus on fee income, improving productivity and significant improvement in asset quality have led to delivery of 15.03 per cent RoE for FY18, even after injection of Rs 3000 crore capital in March to the parent.

"I am confident we'll meet our RoE target of 16-18 per cent well ahead of the 2020 deadline," MD & CEO Dinanath Dubhashi told PTI in a post-earnings concall.

On cost-cutting, he said the cost to income ratio has improved by 302 bps to 23.16 per cent for the year from 26.18 per cent in FY17 on the back of productivity and efficiency gains.

On asset quality, he said during the quarter, gross NPA of Rs 3,884 crore, or 4.80 per cent of the loan book was down from Rs 3,969 crore or 5.49 per cent a year ago. Net NPAs at Rs 1,845 crore or 2.34 per cent was also down from Rs 2,020 crore or 2.87 per cent.

For the full year, GNPA stood at 7.11 per cent and net NPA at 5.02 per cent, he said, adding provision coverage rate rose to 52.51 per cent from 49.11 per cent.

Advances soared 68 per cent for the quarter and 28 per cent for full year against led by rural finance which nearly doubled (by 97 per cent), while for the full year it rose 64 per cent; housing finance rose 56 per cent (51 per cent) and wholesale finance jumped 65 per cent in the quarter and 13 per cent for the full year.

Commenting on the results, he said this improved profitability was delivered on back of overall businesses growth, competitive product positioning, along with using digital and data analytics as a differentiator and a robust risk management framework.

Average assets under management in investment management business rose to Rs 65,932 crore from Rs 39,300 crore, a growth of 68 per cent. Average assets under service in wealth management rose to Rs 18,346 crore from Rs 13,623 crore, a growth of 35 per cent.

Dubhashi attributed the substantial improvement in asset quality to "the vigorously monitored early warning signals, concentration on early bucket collections and continuous efforts on asset resolution".

He said going forward asset quality will improve further and he expects the rural business and housing ratio which is 42 per cent of the total income to cross 50 per cent in FY19.

Total income in the quarter rose to Rs 2,937.44 crore from Rs 2,238.09 crore, and rose to Rs 10,499.94 crore for the year from Rs 8,572.31 crore.

The company counter closed 1.15 per cent down at Rs 171.65 on the BSE against a 0.21 per cent correction on the benchmark.

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