Kolkata-based NBFC, Magma Fincorp, has exited its gold loan business. According to V Lakshmi Narasimhan, Chief Financial Officer, Magma Fincorp, the lack of synergy with other businesses, coupled with volatility in gold prices and the regulatory environment led to the exit.

The company’s outstanding gold loan portfolio stands at ₹26 crore. It was around ₹98 crore at the end of last fiscal.

“We have not sold the portfolio. But, ran it over (closed it down),” he said.

Apart from gold loans, Magma’s asset portfolio includes housing, cars, tractors, used assets, and commercial vehicle finance.

According to the CFO, the company is expecting a 10-15 per cent growth in disbursals during this fiscal.

Till December 31, 2014, disbursements increased by 16 per cent to ₹2,835 crore. Assets under management stood at ₹19,503 crore. For the quarter ending December 31, 2014, the company reported a near 10 per cent increase in standalone net profit to ₹34 crore, from ₹31 crore in the year-ago period.

Total income from operations (standalone) rose by over 12 per cent to ₹524 crore in the October-December period of this fiscal (₹467 crore in the year-ago quarter).

Insurance business

Meanwhile, Magma HDI General Insurance, a subsidiary of Magma Fincorp, has turned profitable. In the first nine months of FY15, the insurer reported a net profit of around ₹6 crore. The company broke even in the first quarter of this fiscal.

The insurance company, which commenced business in October 2012, is a 74:26 joint venture between Magma Fincorp and German insurer HDI-Gerling Industrie Versicherung.

“We broke even in the seventh quarter of our operations. The insurance company benefited from the group’s synergy,” Narasimhan said, adding that premium collection stood at nearly ₹500 crore in the April-December period.

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