Good Days for Muthoot Finance Shareholders – Business World
Gold-loan lender, Muthoot Finance has registered a 59% rise in net income at Rs. 841 crores in Q1 FY21 against Rs. 530 crores within the corresponding period of the previous year.
The brand has also achieved a consolidated PAT of Rs. 858 crores against last year’s Rs. 563 crores, an increase of 52%.
However, loan assets of Muthoot Finance have declined by Rs. 315 crores on account of closure of branches in April thanks to the pan-India lockdown. The loan assets stood at Rs. 41,296 crores, compared to Rs. 35,816 crores in the last year.
MG George Muthoot, the Chairman, said the company has up-scaled its digital platforms to make sure business continuity following the disruptions in business thanks to the pandemic. “We recorded a four-fold jump in digital loan disbursals. We are incentivising customers with a cash-back scheme to service interest payments through online platforms. With businesses resuming, we have witnessed a surge in gold loans, as it is the most convenient form of availing working capital for small business and traders to kick-start their businesses.”
George Alexander Muthoot, the CEO, said: “We are looking forward to achieve a 15 per cent growth in gold loan portfolio for FY21. The company also maintained a liquidity buffer of Rs. 8,477 crores as cash, bank and investments in liquid funds as on June 30. The collections in non-gold loan portfolio have significantly improved month-on-month. Additional COVID ECL provisions to the extent of Rs. 32 crores were made for non-gold loan portfolio in the quarter.”
Muthoot Homefin (India) Ltd, the wholly-owned subsidiary, achieved a profit after tax of Rs. 0.41 crores in Q1 against Rs. 6 crores within the previous year. The corporate also made a COVID ECL provision of Rs. 13 crores additionally.
Belstar Microfinance Limited achieved a PAT of Rs. 15 crores in Q1 against Rs. 23 crores within the previous year. The corporate made a further COVID ECL provision of Rs. 6.83 crores.
Muthoot Insurance Brokers Pvt. Ltd. generated a PAT of Rs. 4 crores in Q1 against Rs. 3 crores within the previous year.
The Sri Lankan subsidiary, Asia Asset Finance PLC, incurred a loss of LKR 2 crore in Q1 FY21 against previous year profit after tax of LKR 3 crore.
The loan portfolio of Muthoot Money, engaged mainly in extending loans for vehicles, decreased by Rs. 12 crores in Q1. The corporate also made a further COVID ECL provision of Rs. 12.19 crores.