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The lender's net non-performing assets (NPAs) were stable at 1.59% while the provisions to loan book stood at 3.7%. The cost to income ratio declined to 12.8% in FY21 from 16.2% for FY20 on the back of measures taken to improve cost efficiency.

The lender said that its funding costs have moderated with incremental funds being raised at sub 8% per annum levels. This has helped bring down the cost of funds on books to 8.5%. Its spread on the book has expanded to 2.7%Overall, in FY21, it raised over Rs 340 bn through equity, bank lines, bonds, and loan sell downs. As a result, its capital adequacy ratio (CAR) stood healthy at 30.7% with Tier 1 Capital at 24%. The company has entered into a strategic co-lending partnership with HDFC to offer housing loans to homebuyers at competitive rates. It will originate retail home loans as per jointly drawn-up credit policy and retain 20% of the loan on its books and 80% will be on HDFC's books.

"In FY22, with our co-lending partnerships in place, especially the one with HDFC, we are now set to grow the retail loan book and grow profitability through our technology-leveraged, retail-focused asset-light business model," Banga said.

How the company performs in the next quarter remains to be seen. Meanwhile, stay tuned for more updates from this space.

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Disclosure: Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research ...

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