Date:30/05/2006 URL: http://www.thehindubusinessline.com/2006/05/30/stories/2006053002730600.htm

Back Citicorp Finance posts lower profit

Our Bureau

Chennai , May 29

Citicorp Finance has reported a lower net profit of Rs 2.76 crore for the nine months period ended December 31, 2005 compared to Rs 37 crore for the corresponding period in the previous year. Stiff competition, low yields, relatively high operating costs and modest asset quality have contributed to the decline.

A rating release from CRISIL points to the increased delinquency levels (at a 180 days past due level) to 3.36 per cent as on March 31, 2006 as compared to 1.54 per cent on September 2004.

CRISIL expects an improvement in asset quality since Citicorp Finance has consciously reduced its dependence on the

Debenture rating

non-direct channel of originating commercial vehicle finance assets (associated with higher default levels).

CRISIL has assigned AAAr rating for Citicorp Finance's equity linked debenture issue and reaffirmed its "AAA/Stable/P1+" ratings on Citicorp Finance's non-convertible debentures and short-term debt programmes. The release adds that these ratings reflect the strong managerial, operational and financial support derived from its ultimate parent, Citigroup, apart from the diversified resource profile and healthy capitalisation.

Citicorp Finance had a net worth of Rs 930 crore and Tier I capital adequacy of 16 per cent as on March 31, 2006.