Non-banking financial company Bajaj Finance on Tuesday reported a 54% growth in its consolidated profit to Rs 923 crore during the quarter ended September, boosted by higher growth in assets under management (AUM).
Non-banking financial company Bajaj Finance on Tuesday reported a 54% growth in its consolidated profit to Rs 923 crore during the quarter ended September, boosted by higher growth in assets under management (AUM). However, Bajaj Finserv, the holding company for various financial services businesses under the Bajaj Group, posted a marginal increase in its PAT as insurance companies faced claims from the extensive floods in Kerala, battled a liquidity crunch following defaults by IL&FS group companies. Besides, the company had reduced the quantum of its crop insurance during the quarter due to unfavourable pricing in the kharif season, which affected the overall gross written premium of its general insurance business.
Bajaj Finance’s AUM reached Rs 1,00,217 crore, a 38% growth. Its consolidated net interest margin went up by 42% to Rs 2,729 crore. Total income rose by 40% to Rs 4,296 crore. Loan losses and provisions for Q2 were at Rs 315 crore against Rs 221 crore in Q2FY18. Gross NPA and net NPA stood at 1.49% and 1.53%, respectively, while the provisioning coverage ratio stood at 65%.
MD Rajeev Jain said the gross and net NPA came down y-o-y and were range-bound. Provisioning had increased as it had provided for IL&FS exposure of Rs 225 crore through the loan against property financing it providedfor two commercial towers in Gift City.
The consolidated results of the company includes the results of its wholly-owned subsidiaries Bajaj Housing Finance and Bajaj Financial Securities (Bfinsec).
Bajaj Finserv PAT flat
Bajaj Finserv reported a near flat PAT of Rs 704 crore during the quarter. However, its consolidated total income rose 17% to Rs 9,698 crore. The general insurance business saw a drop in profit to Rs 182 crore from Rs 260 crore a year ago. The life insurance shareholder’s PAT was down to Rs 132 crore from Rs 188 crore.
S Sreenivasan, CFO of Bajaj Finserv, said Bajaj Allianz General Insurance Company had to face claims from the extensive floods in Kerala and had impacted the underwriting results adversely by Rs 63 crore. According to Sreenivasan, the company had also deliberately reduced the quantum of its crop insurance during the quarter to Rs 475 crore against Rs 1,145 crore in Q2FY18 due to unfavourable pricing in the kharif season.
The insurance companies also had an exposure to IL7FS commercial paper with the life insurance business’s exposure at Rs 125 crore for which the company had provided `32 crore while the non-life business had a Rs 48-crore exposure for which it had provided Rs 12 crore, Sreenivasan said.