Don‘t see any significant drop in NIMs: Manappuram Gen

I Unnikrishnan, ED, Manappuram Gen Fin, says that the business in improving for the company and he expect assets under management (AUM) to grow around 10 percent from September levels for the next six months.

Also read: Worst over for Manappuram, may get re-rated: Espirito Below is the edited transcript of his interview to CNBC-TV18. Q: We saw a decent amount of gold imports. Gold prices itself has done well. Is business improving for the company? Will the third quarter be better than second quarter?
A: Yes, the business is improving for us. We expect assets under management (AUM) to grow around 10 percent from September levels for the next six months. Q: Your Net Interest Margins (NIMs) had been down close to 300 bps on a QoQ basis. At 12 percent how do you see the next half of the year to pan out? Are they likely to be stable or is there still more of a decline which is possible in NIMs?
A: We do not foresee any significant drop in NIM, 11-12 percent should be stable for next six months. Q: When you last spoke to Reserve Bank they were still contemplating on more conditions on gold loan companies for consumer protection. There was an expected circular from them. Will the cost increase if some customer protection rules are put in place?
A: Already many customer protection measures were in practice within companies like us but the RBI had made more improvement on it. There is some increase in cost, as we have changed some of the documents into various regional languages. Q: You mentioned that 10 percent growth is possible in AUMs. How do disbursements look like?
A: Yes, there will be a corresponding increase in disbursements as well. Q: How do you expect the fourth quarter to pan out? You had reached a situation of contracting AUM and then there was flat AUM in the second quarter. You mentioned 10 percent rise in AUM in the third quarter. Will 2013 be a better year?
A: At the beginning of the year we indicated that this year will be flat. We saw marginal de-growth in first two quarters. Currently, we say that this would be at 10 percent below growth which will translate into flat growth for the full year. Q: Do you expect FY14 to be better than FY13?
A: FY14 looks bright and we expect some clarity on regulations to come in FY14. We also expect more regulatory clarity towards the end of this financial year. Once there is clarity, next year will be normal and we may grow by 20-25 percent in FY14. Q: Which is the fastest growing state for the company?
A: We have business presence in southern India and we have been growing significantly outside southern India from last two years. Q: Do you have any plans to branch out of gold?
A: No.