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CreditAccess Grameen Q2 Review - RoA At 4% With Improved Visibility On Further Expansion: ICICI Securities

Post the removal of pricing cap, the company implemented risk-based pricing, which would lead to asset yield expansion.

<div class="paragraphs"><p>A lady holding 500 rupee Indian banknote for photograph.&nbsp;(Photo: Usha Kunji / Source: BQ Prime)</p></div>
A lady holding 500 rupee Indian banknote for photograph. (Photo: Usha Kunji / Source: BQ Prime)

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ICICI Securities Report

Q2 FY23 was a quarter in which all operating parameters of CreditAccess Grameen Ltd. were back to pre-Covid levels. Most importantly, collections were at 97% (excluding arrears), net customer base grew 3% QoQ (highest since March 2020) and return on asset touched pre-Covid level of 4%.

Disbursements doubled on sequential basis to Rs 43.7 billion. During Q1 FY23 the same was down 61% QoQ due to process migration as per revised regulatory norms.

CreditAccess Grameen's net non performing loans and standard restructured book at less than 1% as of September 2022 reinforces our view that the most Covid-related stress is recognised and adequately provided.

Credit cost in Q2 FY23 appears marginally higher at 2.5% as it written-off Rs 1.7 billion.

Negligible legacy stressed asset pool suggests write-offs hereon would be significantly lower than in the recent past and the same would ensure downward trajectory in credit cost in coming quarters.

Click on the attachment to read the full report:

ICICI Securities CreditAccess_Grameen Q2FY23 Results Update.pdf

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