Muthoot Finance Q2 profit jumps 53% to Rs454 crore
New Delhi: Kerala-based gold loan provider Muthoot Finance Ltd on Wednesday registered a record profit of Rs454 crore for second quarter ended September, up 53% from a year ago on robust collection and good performance by subsidiary companies.
The largest gold financing company in terms of loan portfolio had made a net profit of Rs297 crore in the September quarter of the previous fiscal. Its chairman M.G. George Muthoot said: “Another historic record performance with 53 per cent increase in net profit at Rs 454 crore. The performance again reiterates the robustness of collection mechanism followed by the company while protecting customer interest.”
Total income increased to Rs1,670 crore during the quarter, up 20% from Rs1,386 crore a year ago, it said in a statement. However, there was a significant rise in non-performing assets (NPAs) with gross NPAs rising to 4.56% of gross advances as of September 2017 from 2.19% in September 2016.
Net NPAs too rose to 3.99% from 1.82%. In absolute terms, gross NPAs increased to Rs1,259.3 crore as on 30 September, up from Rs601.6 crore a year ago. Net NPAs were Rs1,102.1 crore against Rs499.7 crore. The company made reserves of Rs157.1 crore as provision for NPAs or bad loans, up from Rs101.9 crore a year ago.
“The rise in NPA accounts in Muthoot Finance is mainly on account of more time given to customers for repayment on our shorter tenor loans of 6 months which became NPA faster than our conventional loan tenor of 12 months.
“The company has also increased standard asset provision to 1.25 per cent higher than the regulatory requirement of 0.35 per cent,” said George Alexander Muthoot, managing director of the company.
Its loan assets under management were Rs27,608 crore as at end-September 2017. He said the subsidiaries of the company have again shown an excellent performance. Its fully owned subsidiary Muthoot Home Finance reported a net profit rose to Rs5 crore in second quarter from Rs25 lakh a year ago.
NBFC firm Belstar Investment and Finance Pvt. Ltd in which it holds 64.60% stake reported profit after tax of Rs7 crore, up from Rs2 crore; while Muthoot Insurance Brokers generated a new premium of Rs22 crore during July-September of this fiscal against Rs19 crore. However, Sri Lanka based foreign subsidiary Asia Asset Finance, in which it has 60% stake witnessed a decline in net profit at Sri Lankan Rupees (LKR) 4 crore from LKR 6 crore.
Muthoot Finance provides personal and business loans secured by gold jewellery or gold loans, primarily to individuals who pledge gold ornaments due to non-access to formal credit. It also gives credit to people with no access to credit at all. Stock of the company closed 0.81% up at Rs473.10 apiece on BSE on Wednesday.