Muthoot Finance net profit up 80%

Leading gold loan company Muthoot Finance today posted an over 80 per cent jump in net profit at Rs 892 crore for the financial year 2011-12.

The company had posted a net profit of Rs 494 crore in the previous fiscal.

Total income during the year went up by over 96 per cent at Rs 4,549 crore as against Rs 2,316 crore in 2010-11.

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The company’s board has recommended a maiden dividend of 40 per cent for the fiscal ended March,2012 which was subject to shareholders approval,he said.

The operating environment of the company had been substantially redefined due to the restrictions imposed by RBI in February last on the maximum loan that could be given against the value of the jewels pledged,company Managing Director Alexander George Muthoot said.

Muthoot was taking ‘fleet footed steps’ to sustain growth and profitablity in the changing business environment complying with the RBI directives in toto,he said.

Despite competition from banks,other NBFCs and the RBI restrictions,there was a plethora of opportunities for increasing income,Executive Director K Padmakumar said.

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Muthoot would have to ‘re-engineer’ its strategies to sustain the profit despite the RBI cap of 60 per cent loans on ornaments pledged,he said.

With more public sector banks foraying into gold loans,competition was going to be heated up and there was need to ‘re-jig’ efforts to meet competition from the banks,he said adding banks have no caps as the NBFCs.

Muthoot has a branch strength of 3,678 across the country.