Muthoot Finance jumps over 3% post Q2 results

NEW DELHI: Shares of Muthoot Finance climbed as much as 3.64 per cent to close at Rs 490.30 on Thursday after the company reported 53 per cent jump in net profit at Rs 454.16 crore for the quarter ended September 30, 2017 against Rs 296.72 crore in the corresponding quarter last year on Wednesday.

While commenting on the results MG George Muthoot, Chairman said, “The performance again reiterates the robustness of collection mechanism followed by the company while protecting customer interest.”

Total income of the Kerala-based gold loan provider climbed to Rs 1,670 crore during the quarter, up 20 per cent from Rs 1,386 crore a year ago.

However, there was a significant rise in non-performing assets (NPAs) with gross NPAs rising to 4.56 per cent of gross advances as of September 2017 from 2.19 per cent in September 2016. Net NPAs too rose to 3.99 per cent from 1.82 per cent.

George Alexander Muthoot, Managing Director said, “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. Company has also increased standard asset provision to 1.25 per cent higher than the regulatory requirement of 0.35 per cent.”