Muthoot Finance Q4 net down 6% to Rs 220 crore

MUMBAI: Gold financier Muthoot Finance posted 6% drop in net profit to Rs 220 crore during the fourth quarter of 2012-13, mainly due to slowdown in business.

It had made a profit of Rs 235 crore in the corresponding period last year. The company's total income grew 9% to Rs 1,411 crore against Rs. 1294 crore.

The company that lends against household gold expects a slightly higher growth this year. "We plan to grow by 10-15% in 2012-13," said Alexander Muthoot. "The credit need will not come down with the prices falling. Customers are not affected by the recent correction in gold prices."

Shares of the company fell 5.13% on Bombay Stock Exchange.

During the year, the company posted growth of 13% in net profit to Rs 1,004 crore. Change in regulations like cap on loan to value ratio coupled with price correction took a toll on the business.

Credit losses of the company grew to Rs 13 crore from Rs 6.92 crore. Muthoot said that an account falling into NPA category, need not result in a loss for the company. "We have gold as a collateral," he said. The company has decided to increase standard asset provisioning 0.25% to 0.30% in the quarter. This is in line with the Usha Thorat Committee's recommendations of moving towards 0.40% standard asset provisioning.