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Bajaj Finance Ltd (BFL) on Wednesday reported a 45 per cent increase in its standalone net profit to ₹1,488 crore for the third quarter ended December 31, against ₹1,023 crore in the year-ago period.
Net interest income (interest earned less interest paid on borrowings) was up 38 per cent year-on-year (YoY) at ₹4,267 crore (₹3,086 crore). Fees and commission income rose 44 per cent YoY to ₹655 crore (₹454 crore).
Finance costs rose 30 per cent YoY to ₹2,052 crore (₹1,579 crore). Fee and commission expenses jumped 59 per cent to ₹291 crore (₹183 crore).
Loan losses and provisions for accounts classified in the expected credit loss (ECL) stage 1 and stage 2 categories soared 178 per cent YoY to ₹198 crore (₹71 crore). Loan losses and provisions for accounts classified in the ECL stage 3 and written off jumped 66 per cent YoY to ₹619 crore (₹374 crore).
‘A good quarter’
The company, in an investor presentation, said: “A good quarter, despite slowing demand environment, an episodic provision on a broker account and higher credit costs...Search trends on our large keyword portfolios across loan and consumption categories (electronics, mobile, furniture, apparel) reflected a significant demand slowdown in Q3.”
“However, there is some uptick in our consumption categories since December, which has continued in January so far,” it added.
“The Republic Day sales momentum was also strong. However, we need to watch the incoming data for a little longer period to have a definitive view on demand environment,” the presentation noted.
AUM increases 24%
The assets under management (AUM) of BFL — which operates in financing segment such as consumer, small and medium enterprises, commercial and rural — rose 24 per cent YoY to ₹1,16,460 crore (₹93,903 crore).
Its gross non-performing assets (GNPA) and net NPA stood at 1.61 per cent and 0.70 per cent, respectively, as of December 31, 2019. Sequentially, its GNPA was flat while NNPA moved up by 5 basis points, the company said. One basis point equals one-hundredth of a percentage point.
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The product seems suitable for those whowant to invest regularly in deposits but don’tkeep tabs on interest rate changesOn a consolidated basis, including the results of wholly-owned subsidiaries Bajaj Housing Finance Ltd and Bajaj Financial Securities Ltd, BFL’s net profit rose 52 per cent YoY to ₹1,614 crore (₹1,060 crore).
Approval for NCD issue
The BFL board on Wednesday approved the raising of funds, subject to shareholder approval, inter alia, by an issue of non-convertible debentures (NCDs) as a part of the proposed increase in overall borrowing limit from ₹1,30,000 crore to ₹1,60,000 crore.
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