Muthoot Finance is confident of maintaining margins at around 9.39 percent, says George Alexander Muthoot, MD of Muthoot. The company had reported around 9.6-9.7 percent net interest income (NII) in the year-ago period.
He adds that the company's asset under management (AUM) currently stands at Rs 20,000 crore.
Below is the verbatim transcript of George Alexander Muthoot's interview with Latha Venkatesh & Sonia Shenoy on CNBC-TV18.
Latha: Why net interest income is so muted. Are people not taking too many loans?
A: The net interest income is flat though but it\\'s not that people are not paying interest; people are still paying interest. In the last four quarters we have seen the asset growth and in the last 12 months or year on year the assets have grown by Rs 3,000 crore. So the interest income is also increasing but the yield has slightly come down because consciously interest rates have been reduced. We can make up and protect our NIMs of 9.39 by managing by lower cost of funds because fund cost is also coming down and consequently the yield is also coming down but we are able to protect the NIM of 9.39.
Latha: Can you give me some comparison. You said assets under management (AUM) have gone up by 3,000 crore. How does this compare with the usual run rate? This is a year on year expansion? How does it compare with previous years?
A: It is Rs 3,500 year-on-year, but in the previous year there was a net decline of almost Rs 3,000 crore. So the decline that we saw two years back, in the last one year we got Rs 3,000 crore back and in the last quarter, Q4 we have grown by Rs 1,000 crore. Today our AUM stands at Rs 24,000 crore.
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