India`s Muthoot Finance posts quarterly profit jump on loan growth, gold price spike
Indian gold loan financier Muthoot Finance on Thursday reported an 87.5% jump in second-quarter profit, aided by higher loan demand amid soaring prices of the precious metal.
The firm's standalone profit for the July to September quarter rose to 23.45 billion rupees ($266.80 million) from 12.51 billion rupees a year earlier.
Gold prices hit a series of record highs during the quarter, lifting the value of gold holdings and benefiting financiers in the sector. The rally boosted collateral values, allowing borrowers to secure bigger loans.
Tighter credit conditions in the unsecured lending market also pushed more borrowers toward gold loans as an alternative source of funds, supporting growth in the segment.
The company's standalone loan assets under management rose 47% year-on-year to 1.32 trillion rupees at the end of September.
Its interest income rose about 55% to 63.04 billion rupees.
($1 = 87.8950 Indian rupees)
