Non-bank lender Bajaj Finance today reported a 21 per cent jump in December quarter net at Rs 194 crore driven by a healthy spike in loan growth.
Bajaj Finance Ltd's net profit for the corresponding October- December period last year was Rs 160 crore.
The Pune-based company, which has applied for a bank licence, has also become one of the few non-bank lenders to prudentially set aside money for bad assets like a bank, even though it eats into the bottomlines, a top official said.
"We have completed the process of provisioning like a bank, wherein we start setting aside money within 90 days of non-repayment, unlike the 180 days enjoyed by NBFCs. We have also increased the standard asset provisioning to 0.40 per cent from the 0.25 per cent," its chief executive Rajeev Jain told PTI over phone.
Sanjiv Bajaj, the managing director of company's parent Bajaj Finserv told PTI that the idea behind the move is to be conservative and the decision has been taken because the company has a diversified book.
The accelerated provision as a result of this policy affected the company's net profit by Rs 14 crore, Jain said.
Jain added that the company's book now stands at Rs 22,500 crore, pointing that this is larger than a small sized bank. He also rubbished the question when asked if the group's aspiration of entering the banking fray had any bearing on this policy.
He said while the bank licence application is a recent development, the company has started this process of providing prudentially after the Usha Thorat committee report on NBFCs recommended bringing down the period of NPA recognition to 90 days from the present 180 days. However, the suggestion has not been implemented.
For the October-December period, the company's net interest income grew 33 per cent to Rs 672 crore, on the back of a healthy 45 per cent growth in advances.
The advances growth was driven primarily by a 60 per cent growth in SME book, while there was a dip of 15 per cent in the commercial book, which