Muthoot Finance Q2 Net down 21% at Rs 211 cr

Company reported net profit at Rs 268 crore during the same period of previous year

Gold financing company Muthoot Finance has reported a 21.2% decline in net profit at Rs 211 crore for the second quarter ended September 30.

The Kerala-based company had reported net profit at Rs 268 crore during the same period of previous year, Muthoot Finance said in a statement.

For the half-year ending September 30, 2013, the profit after tax slipped by 21% to Rs 405 crore from Rs 514 crore registered during the same period of previous year.

The total income for the quarter ending September 30, 2013 marginally declined by 1% to Rs 1,302 crore from Rs 1,316 crore.

For the half-year ended September 30, 2013, the net profit of the company dipped to Rs 2,588 crore from Rs 2,610 crore.

"During the last six months, we disbursed 11 lakh foreign inward remittances for personal purposes amounting to Rs 2,500 crore through branches. We purchased foreign currencies worth Rs 136 crore under AD-II, franchisee model tie-up through our retail network," Muthoot Finance Chairman, M G George Muthoot said in a statement.

Muthoot Finance Managing Director George Alexander Muthoot said regulatory uncertainty poses bigger challenge to large NBFCs in the sector and there is no level playing field with banks as well as unorganised sector.

"We continue to appraise the regulator the adverse impact of the regulations. While we recognise the fact that there is need to bring better governance systems across the industry, larger institutions who have taken pain to popularise and played a major role to bring better standards in the business mode should not be unduly squeezed", he said.

 Performance of the company during the second quarter is a reflection of the strength of the business model and it has dispelled the uncertainties and fears about the business models, he said.

"Borrowings cost remains high and is becoming stumbling block in reducing the lending rates. We hope banks will understand the social cause and rationalise its spreads over base rate for such high quality portfolio", he said.

Considering the subdued share prices, board has decided to compensate its shareholders by approving payment of interim dividend of 30% on face value of Rs 10 per share, he said.