Bajaj Finance net up 27% to Rs 176 cr

Company's AUM was up by 22% to Rs 19,229 cr

Pune-based non banking financial company  Bajaj Finance posted 27 per cent rise in net profit at Rs 176 crore in the first quarter of FY14, backed by a healthy growth in net interest income. The company’s assets under management (AUM) grew by 33 per cent to Rs 19,229 crore.

While consumer and small and medium enterprises  segment continued to show growth, AUM in commercial financing continued to decline. It has been declining for the past five quarters as the company has stopped new lending in this segment. Its commercial financing segment comprises construction equipment, infrastructure financing and vendor financing.

Gross non-performing assets (NPA) and net NPA was at 1.14 per cent and 0.25 per cent, respectively. Provisioning coverage ratio (PCR) was at 78 per cent. The capital adequacy ratio (CAR) was a healthy 21.5 per cent. “Some level of deterioration was seen in two wheelers and CE (construction equipment)…  both of these contributed in net NPA going up,” said Rajeev Jain, chief executive officer of Bajaj Finance.

The company has started providing for standard assets as recommended in the draft guidelines for NBFCs based on the Usha Thorat Committee report. The firm made incremental provisioning of Rs 18 crore in the quarter on standard assets.

Bajaj Finance has forayed into rural lending business by opening seven branches in rural Maharashtra in the first quarter. It will open six more rural branches in Gujarat in the third quarter of the year, taking the total number of rural branches to 13. It plans to disburse about Rs 200 crore through these branches this year.

Bajaj Finserv, which is the holding company for Bajaj Finance, has applied for the banking licence and said that, if granted the licence, Bajaj Finance will be converted into the bank, as required by Reserve Bank of India norms.