Muthoot Finance on Thursday reported a 20% fall in the net profit to Rs 154 crore in the December quarter...
Muthoot Finance on Thursday reported a 20% fall in the net profit to Rs 154 crore in the December quarter due to a fall in the net interest income (NII).
The loan book of the company stood at Rs 22,088 crore in Q3 against Rs 22,588 crore in the same period last year. The net interest income (NII) slipped 6.7% to Rs 525 crore in the December quarter from Rs 563 crore in same quarter last fiscal.
Muthoot Finance CFO Oommen K Mammen said the company had taken some customer-friendly measures like launching several products with lower interest rates and that affected their margins.
“There is also a slight reduction in the net interest income due to fall in yields. Since we decided to provide such products with lower interest rates, our yields were affected,” he added.
Muthoot Finance’s non-performing assets (NPAs) stood at Rs 410 crore in Q3, down 9.7% sequentially.
After RBI had capped the loan-to-value ratio to 60% for gold loan firms in March 2012, they began to show lower growth and Muthoot saw a degrowth in its loan book. However, in January last year, RBI allowed gold loan firms to lend up to 75% of the value of the collateral. Mammen believes this helped the company.