Bajaj Finserv net grows 51% in the April-June quarter

Interest income helps Bajaj Finance post 53% rise in net profit

Bajaj Finserv, the Bajaj group's holding company for financial services business, reported a net profit growth of Rs 195 crore for the quarter ended June, an increase of 51 per cent over the previous quarter. Its consolidated gross revenue increased 12 per cent from Rs 2,900 crore to Rs 3,252 crore.

Bajaj Finserv has also announced a rights issue to raise funds worth Rs 1,000 crore. Sanjiv Bajaj, managing director, said the rights issue will be completed in the next two quarters, and the majority of the resources raised will be deployed in Bajaj Finance.

Bajaj Finance, a subsidiary of Bajaj Finserv, reported 53 per cent growth in net profit for the quarter ended June, from Rs 91 crore a year ago to Rs 139 crore.

Higher interest and fee income, with lower loan loss provisions, aided earnings growth during the three-month period.

Net interest income, or the difference between interest income and interest expense, rose 41 per cent to Rs 439 crore, as the Pune-based non-banking finance company grew its loan book and increased its assets base.

Assets under management stood at Rs 14,485 crore at the end of June, and was up 60 per cent from a year ago. Growth was driven by an increase in commercial assets, which expanded 91 per cent year-on-year. SME and consumer assets also grew 61 and 50 per cent, respectively.

Bajaj Finance saw 38 per cent rise in customer acquisition, which aided the growth in its loan portfolio. Total deployments increased 32 per cent to Rs 4,728 crore, driven by higher disbursement of SME and consumer loans. Secured loans had an 84 per cent share in total advances.

The company improved its asset quality, as net non-performing asset ratio fell to a five-year low of 0.10 per cent. This allowed the company to cut its loan loss provisions by six per cent to Rs 32 crore. Provision coverage stood at 91 per cent at the end of June.

Bajaj Finance closed the quarter with a capital adequacy ratio of 16.8 per cent.