Sundaram Finance reaches milestone

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NT Bureau | Sat, 25 Jul, 2009,03:15 PM . The deposits of Chennai-based Sundaram Finance Ltd, a non-banking finance company, has crossed Rs 1,000 crore. Speaking at the 56th AGM of the company, Sundaram Finance chairman S Viji said, ‘this is a significant milestone and I thank the depositors for reposing a high degree of confidence in the company.’ . With the economy slowing down, freight offerings have fallen significantly, thus impacting not only new vehicles but also the viability of existing fleets. Further, Viji said while the prospects for growth in commercial vehicles appeared rather dim, passenger car and multi-utility vehicle sales seem to be on a slightly better footing and could register modest growth during the year. On the focus areas for Sundaram Finance, he said the company would continue to seek profitable avenues of growth in consonance with its quality benchmarks. ‘While topline growth is largely dictated by market realities, the company will focus on maintaining the quality of its loan portfolio and simultaneously seeking other opportunities to ensure a healthy growth in the bottomline,’ he said. When queried on the non-performing assets (NPAs), Sundaram Finance managing director T T Srinivasaraghavan said, ‘ours is the best performing portfolio in the industry. Despite the dramatic slowdown in the industry, our Net NPAs stood well below one per cent. The reason for this lies in the credit standards for acceptance, close monitoring and our strong relationship with customers.’ Viji reiterated the long-pending demand to RBI that risk weightage on assets with lower risk profile like CVs and cars be reduced to differentiate them from other classes of assets which carried inherently higher risks. He also wanted the Finance Ministry to consider treating asset financing companies (AFCs) on par with banks and housing finance companies with regard to tax treatment of income recognition and provisioning in respect of NPAs. The shareholders of Sundaram Finance approved the final dividend of 25 per cent taking the total dividend for the year to 65 per cent for the fiscal ended March 2009.