The gold loan company, Muthoot Finance Ltd., released its financial results for the second quarter of this year. It has recorded an increase in net profits by 25 percent, increasing from Rs. 215 crore it reported last year to Rs. 268 crore it has reported this year.
Its retail loan book increased to Rs. 23743 crore in the current quarter from Rs. 405 crore that it had reported last year in the same quarter. In the first half of the financial year (for the period ending on September 30), the net profits increased by 27 percent, standing at Rs. 514 crore, an increase from Rs. 406 crore that it reported in the same period last fiscal. Its total income in the first half of the current fiscal is reported to be Rs. 2610 crore, which is an increase of 29 percent.
On the matter, the Chairman of Muthoot Finance Ltd., Mr. M. G. George Muthoot said that the first half of the year had been very tough for the non- banking finance entity due to the 60 percent loan-to-value limit enforced by finance ministry only on the NBFCs. He further added that the negative opinion about the sector was another reason that had an adverse impact on its survival. As a result, the asset development had slowed down and the borrowing costs had increased.
He also said, that inspite of these tough conditions the company has improved its profitability with the help of better funds management and costs control mechanisms.