Muthoot Finance registered a net profit of ₹802 crore in Q1 FY23 against ₹971 crore in Q1 FY22, a decrease of 17 per cent year-on-year (y-o-y). Loan assets stood at ₹56,689 crore when compared to ₹52,614 crore in the same quarter last year, registering a growth of eight per cent y-o-y. But they declined by two per cent quarter-on-quarter to ₹1,364 crore.

Consolidated loan assets grew nine per cent to ₹63,444 crore in Q1 FY23, against ₹58,135 crore in the same quarter last year. During the quarter, it decreased by two per cent q-o-q. Consolidated profit after tax declined by 16 per cent y-o-y to ₹825 crore, against ₹979 crore in the same quarter last year.

Dip in loan assets

George Jacob Muthoot, Chairman, Muthoot Group, said the company continued to deliver stellar performance in the gold loan space. “Though there is a dip in loan assets during the quarter, we have achieved a y-o-y growth of nine per cent in loan assets at ₹63,444 crore. High frequency indicators suggest recovery in economic activity, with strong urban demand environment though the rural demand is still reviving.”

The Indian economy has been resilient, he said, and added the company is optimistic about steady demand conditions for gold loans, coupled with the huge untapped opportunity in the gold loan segment. “The RBI approval for opening new 150 branches, coupled with the recent digital initiatives and gold Loan@home service, will help us further expand and tap new customers,” Jacob said.

George Alexander Muthoot, Managing Director, Muthoot Finance, said the impact of the very low interest-rate teaser loans has resulted in lower yields during Q1 FY23.

“Launch of teaser loans was a strategic move taken in Q3 FY22, and it enabled us to attract a set of new high-value customers. During the quarter, we focussed on migrating such teaser loans to higher rate schemes, and we successfully completed this exercise as on June 30. Hence, the decline in loan assets by two per cent,” Alexander said.

Although the number of live customers is 50 lakh, the company has a customer base more than 4-5 times this number, who have had earlier transacted with it, said the Managing Director.

“Certainly, these customers will come back for availing the high quality service we offer them when they require credit. We are expecting opening of 150 new branches, for which approval was received from the RBI to be completed by October, upon which additional business will be generated,” Alexander added.