Muthoot Fin net profit surges 61%

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Kochi | Published: May 28, 2016 7:33:51 AM

Kerala-based gold loan NBFC Muthoot Finance reported a 61% year-on-year increase in its net profit for the quarter ended March at Rs 265 crore, compared with Rs 165 crore, despite sluggish demand.

Kerala-based gold loan NBFC Muthoot Finance reported a 61% year-on-year increase in its net profit for the quarter ended March at Rs 265 crore, compared with Rs 165 crore, despite sluggish demand.

The net profit for FY16 grew 21% to Rs 810 crore, against  Rs 671 crore in FY15. The board has decided to seek the approval of markets regulator Sebi to start a mutual fund. The company has also acquired stake in a microfinance firm based in Tamil Nadu.

Total income for India’s largest gold loan company for the quarter under review increased 32% to Rs 1,451 crore from Rs 1,102 crore a year ago. The loan book stands higher year-on-year at Rs 24,379 crore from Rs 23,408 crore, an increase of 4%.

Total weight of gold pledged with the company stands at 142 tonne at the end of the fourth quarter, against 131 tonne in the corresponding period of last fiscal.

George Alexander Muthoot, MD, said, “Since gold loans are of short duration and consequent to higher level of demand being absent and also due to aggressive recoveries, growth in gold loan portfolio was only 4% during the year. However, we are hopeful of improvement in business in coming quarters. To meet unforeseen contingencies and as a matter of higher level of investor comfort, we have increased the standard asset provision again from 0.52% to 1%, thus keeping a provision in excess of regulatory requirement of 0.30 %.”

“We have acquired 19.50% of Belstar Investment and Finance Private Limited, a microfinance company and are planning to acquire another 37.66% through purchase or subscription of further capital, making it a subsidiary, thus diversifying the company’s business activities,” Muthoot said.

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