India's Manappuram Finance posts Q1 profit rise on strong gold loan growth

IIFL Finance

13/08/2024 12:10

BENGALURU, Aug 13 (Reuters) - Indian gold-loan provider
Manappuram Finance  MNFL.NS  reported a first-quarter profit
rise on Tuesday, helped by strong gold-loan growth. 
    The company's consolidated net profit attributable to owners
rose about 12% to 5.55 billion rupees ($66 million) for the
three months ended June 30, in line with analysts' expectations,
according to LSEG data.
    Benchmark spot gold prices  XAU=  have risen more than 20%
as of June-end from a year ago, hitting record highs, bolstering
loan growth for lenders such as Manappuram.
    Rising prices of bullion benefit gold financiers by
increasing the value of pledged gold collateral, and driving
growth as more customers seek loans against their higher-valued
assets.
    Analysts expect Manappuram to also have benefited from a
regulatory ban on key competitor IIFL Finance  IIFL.NS 
disbursing gold loans.
    Revenue from Manappuram's gold loan and other businesses
rose 23.5% to 17.37 billion rupees, while its microfinance arm
posted a near 18% revenue growth to 7.75 billion rupees.
    Its assets under management rose 21.2% year-on-year to 449
billion rupees.
    Finance cost rose about 31%, leading to a near 28% rise in
total expenses, after India's central bank raised risk weights
for bank loans given to non-banking financial companies.
    The company's provision for bad loans jumped 80% to 2.29
billion rupees. 
    Larger rival Muthoot Finance  MUTT.NS  posted an 11% rise in
first-quarter profit but missed analysts' estimates.
    
   
($1 = 83.9350 Indian rupees)

 (Reporting by Nishit Navin; Editing by Mrigank Dhaniwala)
 ((Nishit.Navin@thomsonreuters.com;))