Gold loan company Muthoot Finance today reported a muted 7 per cent growth in net profit at Rs 270 crore for the third quarter due to "regulatory" curbs.
The company's net profit had stood at Rs 251 crore in the same period last fiscal.
"The net profit numbers were subdued due to legacy issues like de-growth in business due to regulatory constraints.
However, we have witnessed a healthy growth of Rs 1,969 crore in assets under management in the reporting quarter. Going ahead, we hope the growth momentum to continue," Muthoot Finance Executive Director KP Padmakumar said.
Last April, the Reserve Bank had come up with regulations imposing restrictions on the loan-to-value ratio to 60 per cent for gold loan companies.
Referring to margins, Padmakumar said that NIM (net interest margin) stood at 10.51 per cent for the third quarter amid marginal fall in advances as the company reduced interest rates in some categories to woo back customers.
"I hope the NIM to improve as the cost of fund is likely to come down with possible rate cut by the central bank along with higher credit flow from banks and with certainty in regulatory environment," he said.
He also said that the company aimed to touch Rs 29,000- 30,000 crore in gold loan outstanding by end of the fiscal against Rs 25,388 crore reported in December quarter.
Talking of the recommendations of the KUB Rao committee report on gold loan NBFCs, Padmakumar said that the recommendations were positive for the companies working in this space as it dispelled the fear of systemic risk with rise in loan to value ratio.
Muthoot Finance, which is working on some new products for traders, also said it would add another 200-300 branches in the fourth quarter to its present list of 3,914 branches.