Muthoot Finance profit drops 21% on loan growth stagnation

New Delhi: Muthoot Finance today said net profit fell 21.2 percent to Rs 193.88 crore in the first quarter ended June on the back of stagnating loan growth.

Net profit in the corresponding quarter a year earlier was Rs 246.10 crore, the company said in a filing to the BSE.

Total income declined to Rs 1,285.79 crore during the quarter from Rs 1,293.78 crore a year ago.

“The year-on-year decline in profits during the quarter was on account of stagnation in loan growth and lower yield on liquidated loan accounts,” Managing Director George Alexander Muthoot said in a statement.

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Expenses were high on account of lenders continuing higher level of interest and administrative expenses going up with the addition of branches in the past one year, he said.

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The company’s retail loan assets under management stood at Rs 25,848 crore as of June 30.

Muthoot Finance, the Kochi-based gold financing and non-deposit taking NBFC (Non-Banking Finance Company), said it has applied to the Reserve Bank for a banking licence.

“Considering our network in rural and semi-urban areas and experience gained in these areas…We are ideally looking at going for next stage of growth through banking model which has its own advantages and disadvantages…we look at strongly presenting our case before the regulators,” Muthoot said.

Muthoot Finance shares traded at Rs 94.45 apiece at noon on the BSE, up 0.21 per cent.

PTI