Muthoot Finance logs 8% increase in net profit to Rs 1002.9 crore

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The finance company, which also operates home loan, micro-finance and insurance broking subsidiaries, said net profit of the gold loan division increased 11 % YoY to Rs 994 crore ,and the share in the consolidated profit stands at 99%.

NBFC Muthoot Finance on Thursday reported a 8% year-on-year (y-o-y) increase in its second quarter consolidated net profit to Rs 1002.9 crore, mainly driven by good performance of the gold loan division.

The Kerala-based lender had reported a consolidated net profit of Rs 930.7 crore in the year-ago period and a net profit of Rs 978.6 crore in the preceding first quarter..

The finance company, which also operates home loan, micro-finance and insurance broking subsidiaries, said net profit of the gold loan division increased 11 % YoY to Rs 994 crore ,and the share in the consolidated profit stands at 99%.

Consolidated loan assets under management of Muthoot increased 5% on a sequential basis to Rs 60,919 crore.

MD George Alexander Muthoot said, “The demand environment remains strong and as we enter the festive season we remain optimistic about growth momentum in gold loan over the second half of FY22. We are optimistic about growing our gold loan book further and maintain 15% growth guidance for FY22. We are witnessing improved collections across micro finance, vehicle finance and home loans. In the last quarter we had consciously decided to go slow on non-gold lending business, we continue to remain conscious and monitor the space for emerging opportunities. We will continue to follow the strategy of balanced growth while maintaining overall asset quality.”

Loan assets of the gold loan division for the quarter stands at Rs55102 crore compared to Rs 5,2394 crore in the comparable quarter of the previous year, which is 5% y-o-y growth.

Average gold loan per branch has increased by 18% YoY to Rs 11.84 crore. Total weight of gold pledged with the company stands at 178 tonne at the end of the second quarter as against 163 tonne in the corresponding period of last fiscal year. Average loan ticket size has increased by 2 % YoY to touch Rs 62,054 as against Rs 60,642 in the year-ago period. Number of loan accounts of the NBFC has also increased 88 lakh, an increase of 16 % YoY.

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Muthoot Finance launches AI-powered virtual assistant

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Customers can chat or speak with the virtual assistant in English and Hindi. The virtual assistant is also available on WhatsApp.

Muthoot Finance said on Tuesday it has joined hands with Senseforth.ai, a leader in conversational AI technology, to launch ‘Mattu’, an AI-powered virtual assistant.

Available on the website and mobile app, the intelligent assistant enables users to apply for loans, address concerns, and perform transactions like checking account balance, paying gold loan interest, availing loan top-ups and making part payments.

Alexander George Muthoot, deputy managing director, The Muthoot Group, said, “The launch of a revamped and turbo-charged Mattu marks the beginning of a new chapter for us.

This AI-powered virtual assistant offers various customer-friendly features like multilingual support and voice search capability, and can handle more than 250 frequently asked questions. Besides, if a user wants to speak with our customer service representative, they can do so via the virtual assistant. This is great customer convenience in current times.”

Customers can chat or speak with the virtual assistant in English and Hindi. The virtual assistant is also available on WhatsApp.

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Demand for gold loan surging: Muthoot Finance

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Muthoot said its gold loan business is likely to grow by more than 15% in the next three years.

NBFC Muthoot Finance said the demand for gold loan is consistently rising. Managing director George Alexander Muthoot told FE the company is adding new customers to its gold loan business on a daily basis with small businesses and traders preferring it for a quick loan.

“We have a customer base of 2-3 crore, and at this point of time, we have more than 60 lakh active loan accounts. The number of people taking a loan on any day is more than the number of people closing a loan account. The number of active customers has been increasing for the last three-four months. Our quick loans are helping many to restart their businesses,” he said.

Muthoot said its gold loan business is likely to grow by more than 15% in the next three years.

He said raising capital for business expansion has become easy and the incremental borrowing rates are seen coming down. The average yield of the NBFC is 19% and it is likely to fall with the cost of funds coming down.

Muthoot exited its white label ATM business in December 2020 as the venture was not making money. He said digital transactions are increasing and more than 60% of customers do some digital transactions.

The company, which also operates home loan, microfinance and insurance broking subsidiaries, has plans to open 150-200 branches a year, adding to its existing 5,330 branches.

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