Bajaj Finance (BFL) is entering into the broking and depository business. BFL’s MD Rajeev Jain said this was an extension to their existing loans against securities business. This was a Rs 8,500-crore lending business for BFL and the addition of broking and demat services would grow this business further, with their affluent customer base and a larger share of the client wallet. This foray would also reduce their risk in this business and add to the profit pool, Jain said. He expected this business to grow over the next three to five years. “We deal with HNIs and were lending to them, so offering broking was a natural extension for the company,” Jain said.

Their clients had a portfolio of around Rs 18,000 crore maintained with them in the loan against securities business. For now, the focus will be broking and demat services, but after this was stabilised, wealth management could be the next stop for the company. The BFL board approved this new business foray at a meeting held in Pune on Thursday. The company’s 100% housing finance subsidiary, Bajaj Housing Finance, also become fully operational from February 2018. All new mortgage business was now being done through it and will be included in the firm’s consolidated results. Jain expected the mortgage business to grow to `1,00,000 crore in four to five years. Both these businesses were incubated at Bajaj Finance and built to a certain scale before being pursued as independent businesses.

So while loan against securities is a `8,500-crore business, the housing mortgage company starts with a business of `26,000 crore already. BAFL’s current business as of June 30, 2018 was at `93,314 crore with consumer B2B contributing `19,131 crore, consumer B2C at `17,195 crore, mortgage at `18,919 crore, SME and commercial lending each at `12,000 crore and rural lending at `6,674 crore. Q1 consolidated profit rises 81% Bajaj Finance reported its highest ever quarterly consolidated profit of `836 crore during Q1FY19, which was an 81% jump over the profit in the same period last year. This is as per the new Ind AS accounting standards being followed for FY19.

Under the previous GAAP standards, profits would have been `1,018 crore. Consolidated AUM during Q1FY19 was `93,314 crore, a growth of 35%. Standalone AUM was `86,042 crore and grew by 25%. Standalone PAT rose 83% to `834 crore while PBT was `1,296 crore, an 84% growth. BFL MD Rajeev Jain said this was among the strongest Q1 performance by the company in many years and the portfolio quality remains at a record best.