Muthoot Fincorp aims to end the financial year with loan growth of 28%


THIRUVANANTHAPURAM : Muthoot Fincorp, the flagship of the diversified Muthoot Pappachan Group and the third-largest provider of all-gold loans, expects to end the current fiscal year with assets up a full 28%, a senior company official said.

The city-based company’s gold loan assets grew 24% in the first three quarters of the current fiscal year, driven by the rise in gold prices during the first half of the fiscal year to around 17,500 crore while the group’s lending operations as a whole have grown to 27,000 crore by the end of December 2020, the official said, adding that real growth is 14 percent as the rest was boosted by rising gold prices.

“We outperformed the previous three quarters with growth of over 27% in the current quarter and ended the year with overall growth of 28% through the end of March,” said Thomas John Muthoot, the group’s chairman and chief executive officer PTI on Monday.

Privately held Muthoot Fincorp is the third largest gold lending company after Muthoot Finance and Manappuram Finance. It has around 3,600 branches across the country and the group, which operates four lending businesses, is also involved in automotive retail, real estate, hospitality, IT and green energy and employs 27,000 people.

The group, also known as Muthoot Blue, has four NBFCs – Muthoot Fincorp, which deals in gold lending, Muthoot Capital, its publicly traded unit, which deals in two-wheeler and used-car lending, Muthoot Microfin and Muthoot Housing Finance.

Muthoot Fincorp also handles domestic and international money transfers, chits, foreign exchange, insurance sales and wealth management, among others.

Muthoot said that despite the drop in gold prices, the company has maintained healthy asset quality, with gross non-performing assets in the gold loan portfolio at 1-1.8 percent over the past five years.

As of the December quarter, GNPA and credit costs were 1.3 percent and 0.2 percent, respectively, he said.

The gold loan portfolio represents approximately 67 percent of the group’s total assets (AUM) as of December 2020. 27,000 crore and 87 percent of group profits.

In the current financial year, Muthoot has paid Ficorp about 38,000 crore to 7.5 million customers, of which 4.5 million customers are nano, micro and small businesses, he said.

During the financial year the company was increased 1.138. 6 crore through public sale of NCDs apart from issuance of NCDs via private placement to banks of 1,750 crores and 997 crore via market-linked notes.

Muthoot also said that Crisil upgraded Muthoot Fincorp’s credit rating to A+ stable from A-stable on Monday.

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