Muthoot Finance, country's largest gold financing company by loan portfolio, on Wednesday reported 59 per cent year-on-year rise in its net profit at Rs 841 crore for the first quarter ended June 30, 2020. The Kerala-based NBFC (Non-Banking Financial Company) had posted a net profit of Rs 530 crore in the year-ago period and Rs 815 crore in the March quarter of 2020.
Total income of the company increased by 28 per cent to Rs 2,385 crore in Q1 FY21 as compared to Rs 1,857 crore in the year-ago period.
Loan assets stood at Rs 41,296 crore compared to Rs 35,816 crore in the previous year, registering a YoY growth of 15 per cent.
"During Q1 FY21, loan assets decreased by Rs 315 crore on account of closure of branches during the month of April 2020 due to pan India lockdown announced by the government in the wake of COVID-19 pandemic," Muthoot Finance said in a filing to the Bombay Stock Exchange.
Commenting on Q1 results, M G George Muthoot, Chairman, said that the company upscaled its digital platforms to ensure business continuity during a pandemic. "We recorded a four-fold jump in digital loan disbursals since then. To encourage digital usage, we are incentivising our customers with a cashback scheme to service interest payments through our 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 kickstart their businesses."
The company's Managing Director George Alexande Muthoot said the firm is looking forward to achieving a 15 per cent growth in the gold loan portfolio for FY21. The company also maintained a liquidity buffer of Rs 8,477 crore as cash, bank and investments in liquid funds as on June 30, 2020. Non-gold loan portfolio in subsidiaries constituted about 12 per cent of the consolidated loan portfolio.
"Collections in non-gold loan portfolio have significantly improved month on month. Additional COVID ECL provisions to the extent of Rs 32 crore were made for non-gold loan portfolio in the quarter," he added.
Meanwhile, shares of Muthoot Finance closed day's trade at Rs 1,256, up 1.32 per cent, against the previous closing price of Rs 1,239.60 on the BSE.