Muthoot Finance expects gold
AUM growth to be at 15% for FY20, says MD
Thu Nov 14 2019
Muthoot Finance on Wednesday
reported a 76.4 percent jump in consolidated net profit at Rs 908.54 crore for
the second quarter ended September 30 of this fiscal. The company's net profit
stood at Rs 515.06 crore in July-September period last year. George Alexander
Muthoot, the managing director of the company, in an interview with CNBC-TV18
spoke the result and outlook for the future.
He said: “I have been trying my
best to have a separate classification for gold loan non-banking financial
companies (NBFCs) because gold loan NBFCs do not have the two big issues which
many other companies or NBFCs have. One, for us there is no NPA [non-performing
asset]. We never had NPA problem. Second, we also do not have any asset
liability management (ALM) issues because our loans’ average period is only 3-4
months.
“Unfortunately, we are also
clubbed with all the other NBFCs. So when banks etc., have a limit or a quota
for NBFCs it gets exhausted elsewhere and finally we are also saddled with
others that’s why funding problem has happened. Now we are trying to get out of
it. We have done one private placement issue and collected Rs 460 crore last
month.”
On home finance, Muthoot said:
“We have tapered down our projections for the home finance because we were
planning to reach about Rs 2,700-3,000 crore of AUM [assets under management]
by the end of the year. As of date we have Rs 2,000 crore probably by the end
of the year we would reach only about Rs 2,300 crore or so.
“We have scaled down the growth
projections there mainly because customers get exposed to builders who are
unable to complete the flats. So today we are looking only at 85-90 percent
completed flats. Our portfolio is home finance is only affordable house, we do
not give any funding for builders, we do not have any funding for anything
else; just plain Rs 10 lakh average is what we do,” added Muthoot.
On the margin front, he said, “We
have increased interest rates, so that should continue but this quarter the
margins were little higher because of the old loans, the NPA loans of the last
quarter being redeemed and full interest getting collected because even this
quarter our auctions are also very little; we did not have to auction because
customers were willing to take back the gold because of the gold price rise. So
we have benefited from that this quarter.
“So small interest margin, we may
not have next quarter but definitely we will have good margins or continue to
have 11-12 percent in the full year,” Muthoot added.
Source: https://www.cnbctv18.com