Manappuram Finance profit down 48% to Rs 84 crore on low yields
Manappuram Finance today reported 48 per cent decline in net profit at Rs 84.38 crore in the third quarter ended December 2012 due to a fall in yields on advances in a tight regulatory environment that led to lower disbursements.
The leading gold financing company had posted net profit of Rs 161.37 crore in the corresponding period of previous fiscal.
Operating income during the reported quarter fell 19 per cent to Rs 586.20 crore from Rs 721.37 crore a year ago.
Since April last year, the Reserve Bank has been tightenings its screws on gold loan companies through a series of measures. Among other steps, RBI has capped the loan-to- value (LTV) at 65 per cent from a high of nearly 90 per cent earlier and also limited banks' exposure to gold loan firms.
"The company had faced greater stress on account of its high LTV-led growth and the subsequent realignment necessitated by regulatory changes," Manappuram Finance Chief Executive V P Nandakumar said.
"However, we are confident that with the positive report of the (RBI-appointed) K U B Rao Committee, and renewed willingness on the part of banking sector, mutual funds and institutional investors to fund gold loans, the outlook would be positive," he added.
Referring to drop in profit, the Kerala-based company said the fall in yield was due to realignment of lending rates in line with lower LTV norms along with launch of lower yielding gold loan products to restart growth in disbursements.
Meanwhile, the gold loan NBFC's average assets under management declined 16 per
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