Bajaj Finserv net profit up 23%

Bajaj Finserv, the holding company that represents Bajaj Group’s interests in the financial services space, posted a 23 per cent growth in consolidated net profit at Rs 347 crore for the December 2014 quarter, driven by growth in Bajaj Finance and its general insurance business. The consolidated gross revenue grew by 17 per cent to Rs 4,802 crore, while income from operations recorded 37 per cent growth to Rs 1,904 crore.

“We have done quite well in Bajaj Finance, the lending business arm, and general insurance. Life insurance has been slightly lower. But in life insurance, we transfer the policy holders profits only at the end of the year,” said S Sreenivasan, chief financial officer, Bajaj Finserv. Its profit after tax recorded 33 per cent growth to Rs 258 crore, while Bajaj Allianz General Insurance Company recorded 51 per cent growth to Rs 143 crore.

“The new business premium in life insurance business is down. But in renewal premium, we are seeing significant growth after several quarters. We think  the renewal book is stabilising. A lot of efforts have been put this year to collect renewal premium,” said Sreenivasan.

Bajaj Allianz Life Insurance Company’s profit after tax recorded a decline of 14 per cent at Rs 99 crore.

The new business premium was down to Rs 572 crore during the quarter, compared with Rs 678 crore in the year-ago period.

“New business premium is muted because last year, we had Standard Chartered Bank which was contributing significantly to our business, as they were our distributors for the past 12 years or so. For several years, we had them as a partner. In May, they  moved out. That affected us in this quarter and that drag might continue in the next quarter,” said Sreenivasan.

He added the company is yet to decide on a deal with Allianz to increase the latter’s stake in the insurance venture at a pre-determined price. According to the recent insurance ordinance, a fair price must be taken for increasing the foreign partner’s stake in an insurance joint venture.

“The ordinance was passed, but has not been approved by Parliament and some rules are also awaited. Then, we would like to see what the partners want us to do and then take it accordingly,” said Sreenivasan.