Lender Muthoot Fincorp plans to end fiscal year with 28% loan growth
Muthoot Fincorp, the flagship of the diverse Muthoot Pappachan group and the third largest player in pure play gold lending, expects to end the current fiscal year with total asset growth of 28%, a senior company official said.
Driven by soaring gold prices in the first half of the year, the city-based company’s gold lending assets grew 24% in the first three quarters of the year ongoing at around Rs 17,500 crore, while the group’s lending activity as a set rose to Rs 27,000 crore at the end of December 2020, the official said, adding that this actual growth was 14%, the rest being stimulated by rising gold prices.
“We have done better in the current quarter, growing over 27% over the previous three quarters and ending the year with total growth of 28% at the end of March,” Thomas John Muthoot , chairman and chief executive of the group, told PTI on Monday.
The privately held Muthoot Fincorp is the third largest gold lender after Muthoot Finance, Manappuram Finance. It has around 3,600 branches across the country and the group, which is also in automotive retail, real estate, hospitality, IT and green energy in addition to managing four credit businesses, employing 27,000 people.
The group also known as Muthoot Blue has four NBFCs – Muthoot Fincorp which is in gold lending, Muthoot Capital its listed entity which is in two wheeler and used car lending, Muthoot Microfin and Muthoot Housing Finance.
Muthoot Fincorp also performs domestic and international money transfers, chits, currencies, insurance sales, wealth management, among others.
Muthoot said that despite the decline in gold prices, the company has maintained a healthy asset quality, with gross non-performing assets of 1 to 1.8 percent in the gold loan portfolio in the over the past five years.
In the December quarter, GNPA and cost of credit stood at 1.3% and 0.2%, respectively, he said.
The gold loan portfolio represents around 67% of the group’s total assets (AUM) as of December 2020, which amounted to Rs 27,000 crore and 87% of the group’s profits.
During the current fiscal year, Muthoot Ficorp has disbursed approximately Rs 38,000 crore to 7.5 million customers, of which 4.5 million customers are nano, micro and small businesses, he said.
During the year the company raised Rs 1,138 6 crore through the public sale of MNT in addition to the issue of MNT through a private placement with banks for an amount of Rs 1,750 crore and Rs 997 crore via market linked debentures.
Muthoot also said that Crisil upgraded Muthoot Fincorp’s credit rating from A- stable to A + stable on Monday.
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