Muthoot Finance net profit down 17% to Rs 802 crore in June quarter

Muthoot Finance (MFIN), India’s largest gold financing company in terms of loan portfolio, posted a net profit of Rs 802 crore during the first quarter of 2022-23, down 17 per cent from Rs 971 crore during the first quarter of 2021-22.

Total income for the quarter under review was seen down by 8 per cent to Rs 2,509 crore as against Rs 2,715 crore during the same quarter in 2021-22. During the quarter, loan Assets stood at Rs  56,689 crore as compared to Rs 52,614 crore in the same quarter last year, registering a growth of 8 per cent year-on-year. During the April to June period, loan assets declined by Rs 1,364 crore, down 2 per cent compared to the previous quarter.

“We continue to deliver stellar performance in the gold loan space. Though there is a dip in loan assets during the quarter, we have achieved a YoY growth of 9% in loan assets at Rs 63,444 crore. High frequency indicators suggest recovery in economic activity, with a strong urban demand environment though the rural demand is still reviving,” said George Jacob Muthoot, Chairman, Muthoot Group. The group’s consolidated profit after tax declined by 16 per cent YoY to Rs 825 crore as against Rs 979 crore in the same quarter last year.  “The RBI approval for opening new 150 branches, coupled with the recent digital initiatives, gold Loan@home service will help us further expand and tap new customers,” he added.

“The impact of the very low interest rate teaser loans has resulted in lower yields during Q1FY23. The launching of teaser loans was a strategic move taken in Q3 FY 22 and it enabled us to attract a set of new high value customers. During the quarter, we focused on migrating such teaser loans to higher rate schemes and we successfully completed this exercise as on June 30, 2022. Hence the decline in loan assets by 2 per cent,” said George Alexander Muthoot, Managing Director, Muthoot Finance.