NBFC Muthoot Finance stated its loan-to-value is at present positioned at 61%, in opposition to the regulatory requirement of 75% and long-term common of 69-70%.
Managing director George Alexander Muthoot informed FE that prospects usually are not taking extra quantity per unit of gold. “We can lend up to 75% of the value of gold, but people take loans only according to their needs. LTV of some of our new loans is in the range of 50% because of higher gold prices. People take only what they want and come for a top-up if they need more,” he stated and added gold in custody has come down within the present quarter.
Total weight of gold pledged with the corporate stood at 163 tonne on the finish of the second quarter, in opposition to 171 tonne within the corresponding interval of final fiscal.
The Kerala-based NBFC is assured of exceeding its steering of 15% development for the present fiscal 12 months with demand for gold mortgage seen good.
Muthoot disbursed contemporary loans to 4.40 lakh new prospects amounting to Rs 3,653 crore and to 4.67 lakh inactive prospects amounting to Rs 3,460 crore.
“Our assets growth has been Rs 5,600 crore in the second quarter and it has made up for the lost business in the first quarter. Our gold loan portfolio grew 14% sequentially to Rs 46,678 crore, while the non-gold portfolio remained flat ,” he stated.
The firm, which additionally operates house mortgage, microfinance and insurance coverage broking subsidiaries, stated the gold mortgage constitutes round 91% of the whole enterprise.
“Collections in non-gold loan portfolio have significantly improved month on month. Our collections in the home finance company is 84% and in the vehicle finance division it is 82%. In the microfinance, it is 86%. We have made COVID provisions in all the divisions,” he stated.
George Muthoot stated the typical yield of the NBFC is 19% and prone to come down with the price of funds coming down. “In the last three months, cost of our incremental borrowing has come down by 2%. But we still have legacy loans. We want to maintain our NIM at 9-10 %.”