Muthoot Finance posts 2.4% rise in profit to Rs 931 crore

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November 4, 2020 4:30 AM

The lender, which also operates a home loan, microfinance and insurance broking subsidiaries, said its gold loan portfolio grew 14% sequentially to Rs 46,678 crore, while the growth in its non-gold portfolio remained flat.

It will provide insurance coverage to the customers of Muthoot Finance as a loyalty product.

Muthoot Finance on Tuesday reported a 2.4% year-on-year (y-o-y) increase in its consolidated net profit to Rs 930.7 crore during the September quarter, as the lender took a cautious approach to lending at its non-gold subsidiaries. Sequentially, the non-bank lender reported an 8% increase in net profit.

In the September quarter, the consolidated assets under management grew 12% y-o-y to Rs 52,286 crore.
The lender, which also operates a home loan, microfinance and insurance broking subsidiaries, said its gold loan portfolio grew 14% sequentially to Rs 46,678 crore, while the growth in its non-gold portfolio remained flat.

Muthoot Finance’s standalone net profit for the gold loan division was at Rs 894 crore, a y-o-y growth of 4% from Rs 858 crore reported in the year-ago period. The Kerala-based lender is confident of exceeding its guidance of 15% growth for the current fiscal year, with demand for gold loan appearing to be robust after a sluggish start in the first quarter. The gold loan company with more than four thousand branches was closed till April 23 due to the Covid-induced nationwide lockdown.

Speaking on the occasion, George Alexander Muthoot, managing director of Muthoot Finance, said, “Subsidiaries followed a cautious approach towards lending. Non-gold loan portfolio in subsidiaries constituted about 11% of consolidated loan portfolio. Collections in non-gold loan portfolio have significantly improved month on month.”

“Our disbursements for the quarter were focused on new customer additions, fresh loans to active and inactive customers and top-up loans to existing customers. We disbursed fresh loans to 4.40 lakh new customers amounting to Rs 3,653 crore and to 4.67 lakh inactive customers amounting to Rs 3,460 crore,” he added.

Total weight of gold pledged with the company was at 163 tonne at the end of the second quarter as against 171 tonne in the corresponding period of last fiscal. Average loan ticket size has increased by 41% y-o-y to touch Rs 60,642, against Rs 43,041 in the year-ago period.

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