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Muthoot Finance management explains Q4 beat

pMuthoot Finance management explains Q4 beatp pmr.

Muthoot Finance management explains Q4 beat

Alexander Muto is managing director at Madrid finance he joins us at a foreign land from Kochi so thanks very much good morning Prashant here could you tell us the basic reason for the number sir I mean profits are up 60 aronia yeah one of the reasons was that there we we modified a little bit about our processes in respect to interest collection and servicing of interest where now we are now started and its more aggressively collecting of all interest use we have started a call centre we have started addressing the branches to go and meet customers so that the customers who earlier were not paying at the interest regularly are now more or less regular and periodically be middle finger so collection of interest has been the big uptick which you have seen in the last quarter and which we see continuing in the next quarters also so that is actually really impacted the project particularly so how is that happen sir I mean how are non paying customers now paying interest regularly I know of you achieve that the actions taken by the branches of the company has redefined its processes meeting customers calling customers sending the messages and also educating the customers to pay the interest move periodically so that the interest bottom is not there on them instead of waiting for five six months to pay interest we are trying to collect it monthly and quarterly etc so for the full interest we are trying to collect and that is why the the interest the collection is competitive and our profits are also better enough so so gold prices are also up substantially right compared to coming compared quarteronquarter or compare your own here right yes also five or ten percent the gold price is also gonna bite it is definitely it is also helped because people are now seeing gold as a much better commodity and so people are borrowing more on all loan and lesser and lesser people are trying to abandon the gold or soup right no so youre the in the recovery would also be helped by this factor sir gold prices certainly it helps to some extent but more is because of the steps taken by us with regard to the curry so we are actually educating the customers going on will certainly earlier seen as a bullet payment where people take a known and after one month two months six months eight months lemons whenever they felt like it they were coming and taking back the loan now we are made it we are making it into a more periodical interest payment culture the cultures rather we are the culture we are changing in that so that that is what is we are teaching our customers that they should regularly start paying their interest earlier it was always blood every payment of interest increases no I mean lets say lets imagine that gold prices for the first quarter cup first quarter seventeen compared to q4 of sixteen say assuming goes down say fifteen percent what do you think that if the impact of that will be on collections collections there will definitely be an impact because people who still feel that they should not abandon their goal they should not lose their goal then we come back and pay the interest because the gold price is also going up they wouldnt want to lose their course so if people dont pair the interest we have to find any option so the number of options have also come down and we also start in a settlement scheme onetime settlement scheme was their iterator also helped and now we are educating them better its actually a constant change which you are trying to do in the gold market okay what was the interest recovery sir I mean in the quarter the interest collection is a thousand four hundred four thousand four hundred course in this quarter in best collections territory yes yes India okay I mean what about auctions auctions are holier was people from close the whole year the option theaters enforce the holier the advances would have been about 90, 000 curves option about 3, 000 crucial right right the I mean are you in cases where you know repayment is not happening etc are you name are you are you settling with borrowers you know anyway by taking a small haircut try a we can we settle with the borrowers we give them some interest confession successful and stately and if they are not coming forward settlement only then we go for the option otherwise we dont go for the options at all we are trying to discourage customers taking options so we do some settlements also we give them some interest concessions so that they get back their volt do you do you think the big point that youre making is that you are trying to change the culture right I mean basically periodic repayment compared to bullet bullet repayment do you think youll be successful in over a period of time or you think you know majority may not make that transition maybe not want to every day around the forty thousand people come to us to take a loan the same 40, 000 another forty thousand come to repay their loan and we have seen that another 18, 000 come to pay their interest which is not there earlier so people are coming just to pay interest just to pay the interest okay what is what is financially a17 going to look like could you give us some indication sir should we see the book growing by around 10 percent plus and also the prophets also proportionately the same prophets also we should like to see 10 percent growth in profit also around 10 percent what about I mean asset quality sir eloquent scenes etc see our own loss is actually what the loss which comes to the company earlier years it was about 19 CROs 20 crores every year this year it is only 10 crores loan loss means that is all all the bad thats the the studious gold the stolen gold burglary theft all those things we write off in the year instance that is actually the loss for us NP is not a loss because that gold is still with us and whatever impair you see in the books as we are speaking if a sentence that would have been recreated by now it says it is just people giving people experience or war finance company it is and loan loss which it to be source P and our loan loss is just point zero four percent of our interest collections of our outstanding sorry point zero four percent only and that is very very reasonable and so compared to last year just come down by fifty percent earlier it was 1919 close 20 close this is its only 10 curves every type of loss whether it will stay in period loss bad debt loss stolen lost furious golden loss everything is written offering the same course so that is basically half for you 10 cruise compared to almost 20 close in 1615 and obviously I mean the attempt will be to further reduce that right going forward we have security measure safety measures we clean our stop you see that it wont accept stolen gold they dont accept the spurious chord etcetera thats the constant training which we need to do all stuff okay but what percentage of this writeoff is due to spurious gold sir even 5 or 10 of this may be this period could be really keen on recovery another good percentages people comment print store in gold with us and accidentally we have to keep taking it and then finally it has to be returned to the customer its a loss for us now of course sometimes burglary theft also happens starker also happens all sorts of problems are there poor dolphins because these are all very valuable and precious commodity cash and gold so its always there thats the part of me so what is could you could you talk to us a little bit about business diversification as well I mean hows that going yes slowly started I was defining our portfolio we have now started a housing finance company which is having a portfolio for both 30 crores on make we would like to grow it we would that company would be looking at this a subsidiary it will be looking at the affordable housing sector which is actually the customers of the golden customers we have about 6.6 million active hold on customers at any point of time they are potential customers for affordable housing so we would like to use Masoud finances lead generators for giving these loans and Achille optimus can also be benefited because they will get the affordable housing finance from put home free thats a subsidiary of food and our we have a subsidiary in Sri Lanka which is also small city but they are doing quite well it has actually doubled its AO and profits in this current year and we have also getting into the microfinance we have purchased we are getting into purchase of a microfinance Belstaff microfinance it has about a 360 crores of assets under management so going forward after the regulatory approval six thats what we will be holding a majority stake in that company also so thats also going slowly but probably in the next year 1 2 years and we are going forward also gold gold will be our focus focus product will always continue continue to be a focus product but we are gradually building up these other verticals also and we are also getting into the insurance broking business the company has got the regulatory approval one more approval is again awaited a small company which is doing the insurance broking its going to be a hundred percent subsidiary of smooth so you are devising our portfolio we are trying to diversify our other fundings other incomes also so housing finance portfolio under the subsidiary is 30 crores yeah sri lanka sri lanka sri lanka what is the operation so what is the nature of the operation of the copper company there in sri lanka what does it do its a non banking finance company which is doing a project after association with us in the last year we have now fully enough operation is one first year of full operations they are started gold on also they are also into microfinance in Sri Lanka it is a portfolio of around thirty twenty billion three billion your Sri Lanka you can just make it half Indian rupee is half so thats about a thousand crores just let me get that numbers better 8.1 billion sorry not twenty 8.1 billion so its about four hundred course four hundred Indian water sorry microfinance company here that you bought with the majority stake is about 360 crores in a UML what we are biting into it we are waiting for the our two sixty four cores two hundred sixty four groups okay I am up to 64 that is that that works in which part of the country sir I works in Tamilnadu Maharashtra Bhopal etc okay and you said youre also getting into the insurance broking business smoking is already there we are making it into a hundred percent subsidiary a small company but its a 20 crore purchase 20 crore project alright thanks very much mr.

Muthoot Finance management explains Q4 beat

moto appreciate your joining in with all of that its a pleasure and good luck for all the other ventures and of course for the main business the gold owned business as well as you saying that is also improving the recoveries are improving and theyre making a concerted effort to change that I mean more regular periodic loan repayments compared to bullet repayment which was the normal earlierp

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