The NBFC's total income dropped 35.4% to Rs 1,965.87 crore in Q4 FY20 from Rs 3,041.20 crore in Q4 FY19. The result was announced on Saturday, 4 July 2020.
Edelweiss reported a pre-tax loss of Rs 2,818.95 crore in Q4 FY20 as against a profit before tax of Rs 405.63 crore in Q4 FY19. The company received a total tax rebate of Rs 537.40 crore in Q4 FY20 as against total tax expense of Rs 159.31 crore in Q4 FY19.
Edelweiss said its total impairment stood at Rs 2,549 crore in Q4 March 2020 based on revisions in the Expected Credit Loss (ECL) model and impact of COVID-19.
In its notes to accounts Edelweiss said, "The impact of the COVID-19 pandemic on Group's results, including credit quality and provisions, remains uncertain and dependent on the current and further spread of COVID-19, steps taken by the government and the RBI to mitigate the economic impact and also the time it takes for economic activities to resume and reach the normal levels."
The company added that based on the foregoing and necessary stress tests considering various scenarios, management believes that the group will be able to pay its obligations as and when these become due in the foreseeable future.
The company said that it has recently finalised a sell-down transaction of $531 million with two global investors for its wholesale loans and plans to sell another $398 million of such loans in FY21.
On a consolidated basis, Edelweiss reported a consolidated net loss of Rs 2,043.77 crore in fiscal year ending 2020 (FY20) as against a net profit of Rs 1,044.37 croreposted in fiscal year ending 2019 (FY19). Total income stood at Rs 9,602.63 crore in FY20, declining 14% from Rs 11,161.22 crore in FY19.
The company's credit business is housed in three key subsidiaries, ECL Finance, Edelweiss Housing Finance (EHFL) and Edelweiss Retail Finance (ERFL). While ECL Finance reported a loss of Rs 1,414 crore in FY20, EHFL and ERFL posted a profit after tax of Rs 2 and Rs 1 crore, respectively.
Commenting on company's performance, Rashesh Shah, Chairman and CEO, Edelweiss Financial Services said, "The last eight quarters have been challenging ones for the financial services industry. A slowing economy was further weakened by the COVID-19 crisis. Throughout this year, our liquidity has been adequate and our capital base more than adequate. In this quarter, we have taken three conscious decisions based on our experience and that of our Board: the markdown and sell-down of our corporate asset book, accelerating to capital light model in retail credit, and the proposed equity raise at Edelweiss and in our Wealth & Asset Management business. These measures will further strengthen both our balance sheet and our dominant franchises. As the economy recovers over the next few quarters, our businesses will be well-poised to grow strongly."
The Edelweiss Group is one of India's leading diversified financial services conglomerates providing a broad range of financial products and services to a substantial and diversified client base that includes corporations, institutions and individuals.