IIFL Finance reported an optically good set of earnings in the second quarter. Net interest income rose, assets under management have grown, but pre-provision operating profit on a year-on-year basis is flat. NPA's are also inching up.CNBC-TV18 spoke to Nirmal Jain, Chairman of IIFL Finance to discuss the earnings fineprint.On pre-provision profit, Jain said, “So we have expanded our brand network and in fact, we added 4,000 people in last six months and out of that 2,700 people in last three months alone. So we got approval from RBI for setting up 700 new branches. In the first six months, we have commissioned 350 new branches. This has led to a significant increase in our operating costs and that is what basically has kept up pre-provisioning profit flat, despite overall growth in all of the parameters.”On net interest margins, Jain said, “Our NIMs have been around 6.50 percent give and take few basis points. Our net profit for the first half of last year versus this is almost more than double, it is 128 percent up. But as you know that the last year, the first quarter was quite severely impacted by the COVID first wave. But if you look at second quarter, then also we were 37 percent year-on-year increase in our profits, and which is 10 percent quarter-on-quarter increase.”“Our loan assets have grown by 8 percent year-on-year in the first half and but the core products where the thrust for growth is which is home loan or gold loan and also microfinance there the growth is higher. Disbursements are going back to the COVID levels, collection efficiency also has improved significantly month over month in last quarter so things are looking things are more optimistic now.”On co-lending he said, “As you know our business model is where we partner with banks and we try and sell our retail loan assets to banks, so do co-lending arrangement with them and we are seeing very strong and very positive response from banks. They are very keen to partner with NBFCs like ours who got last mile connectivity with retail, small ticket borrowers and that is where win-win partnership is there.”On IPO funding Jain said, “That has been very insignificant part of our portfolio. From our point of view, because our focus more on retail customers and small ticket it makes sense that you have many customers borrowing up to one crore rather than, you know, the larger customers who are looking for a much, much larger ticket loan. So as far as IIFL Finance is concerned, our focus has been on retail and in a way this is good.”For full management commentary, watch the video.Also Read: Bajaj Finance drops after Q2 profit misses Street expectations; should you buy, sell or hold shares now?