Bajaj Finance Q2 profit down 36% to Rs 877 crore on increased provisioning

Bajaj Finance’s standalone net profit for the second quarter ended September 30 (Q2FY21) declined 36 per cent to Rs 877 crore, from Rs 1,377 crore in the corresponding period last financial year, because of the rise in loan loss provisions.

Its net interest income (NII) was up 5 per cent to Rs 3,922 crore in Q2FY21, against Rs 3,746 crore in Q2FY20.

Its fees, commission, and other income declined 8 per cent to Rs 600 crore, from Rs 652 crore a year ago.

The Pune-headquartered company said new loans booked during the second quarter dropped 44 per cent to 3.61 million, against 6.45 million a year ago.

Its assets under management (AUM) as of September 30, 2020, declined 5 per cent to Rs 104,986 crore, from Rs 110,946 crore.

The company’s loan loss provisions rose 181 per cent to Rs 1,635 crore in Q2FY21, from Rs 581 crore in the same quarter last year. Consequent to the ongoing pandemic, the company has further increased its provisions on Stage 1 and 2 assets by Rs  1,306 crore to Rs 4,879 crore (as of 30 September), against Rs 3,573 crore on June 30.

The company's liquidity position remains very strong, the company said. The company's liquidity surplus stood at Rs 22,414 crore at the end of the second quarter of 2020-21, against Rs 8,107 crore a year ago, it said.

Shares of Bajaj Finance ended at Rs 3,233.25 apiece on the BSE, down 0.88 per cent from their previous close.