Banking on Progress: NBFCs Report Exceptional Q2 Gains Amid Robust Advances

In the realm of financial services, the second quarter of 2023 has unveiled remarkable growth as banks' advances to Non-Banking Financial Companies (NBFCs) continued their robust upward trajectory. The credit exposure of these banks to NBFCs reached a substantial Rs 14.2 lakh crore in the September 2023 quarter, marking a significant 26.3 percent year-on-year increase.

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In the realm of financial services, the second quarter of 2023 has unveiled remarkable growth as banks' advances to Non-Banking Financial Companies (NBFCs) continued their robust upward trajectory. The credit exposure of these banks to NBFCs reached a substantial Rs 14.2 lakh crore in the September 2023 quarter, marking a significant 26.3 percent year-on-year increase.

This noteworthy expansion in credit exposure serves as a testament to the thriving progress observed in NBFCs in the post-pandemic era. Moreover, the proportion of NBFC exposure relative to aggregate credit has risen from 8.9 percent in the September 2022 quarter to 9.4 percent in September 2023.

As banks consistently extend their credit to NBFCs over the past five years, a prominent financial services player, UY Fincorp, has reported an astounding 90 percent surge in net sales during the second quarter of the current financial year. Net sales have soared to Rs 29.10 crore, a remarkable increase from Rs 15.28 crore in the September 2022 quarter.

Notably, UY Fincorp's quarterly net profit has skyrocketed to Rs 51.17 crore, marking a staggering growth of more than 1500 percent from the previous financial year's corresponding quarter, which recorded Rs 3.05 crore. EBITDA has also seen a sharp increase, reaching Rs 69.02 crore.

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In line with these impressive financial results, UY Fincorp's shares exhibited robust performance, closing in the green with a three percent gain at Rs 25.85 on BSE, as reported by exchange data. Over the past year, the stock has witnessed a remarkable increase of 112.93 percent.

NBFCs, vital components of the financial lending sector, are regulated by the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI). They play a significant role in the economic landscape by offering crucial credit support to micro, small, and medium enterprises (MSMEs).