Bajaj Finance logs best ever quarterly profit, spike in provisions: Key takeaways

Bajaj Finance reported record quarterly profits beating Street estimates thanks to 42 per cent growth in net interest income to Rs 4,537 crore in Q3FY20 from Rs 3,206 crore in Q3FY19.

The quarter was also marked by stellar growth in rural lending and deposits. Provisions also spiked during the quarter.

Here are the key takeaways:


Highest ever profit
Consolidated quarterly profit of the company was their highest ever at Rs 1,614 crore. With this record-shattering performance, the company’s profit in the first nine months at Rs 4,316 crore has already crossed the Rs 3,995 crore profit recorded last fiscal.

Bad loans grow marginally
Shares of bad loans to its assets grew marginally during the quarter. Gross NPA and Net NPA stood at 1.61 per cent and 0.70 per cent, respectively. The same for the December FY19 quarter stood at 1.55 per cent and 0.62 per cent, respectively. The provisioning coverage ratio was 57 per cent, which was also lower from 60 per cent, year ago.

AUM surge 35%
Assets under management (AUM) grew by 35 per cent to Rs 145,092 crore as of 31 December 2019 from Rs 107,507 crore as of 31 December 2018. Rural lending grew 49 per cent, biggest among its segments while commercial lending was laggard, growing at 10 per cent.

Deposits skyrocket
Deposit book of the company grew 76 per cent during the quarter at Rs 20,235 crore. Deposits contribute to approximately 17 per cent of the consolidated borrowings and 21 per cent of the standalone borrowings of the company.

New loans grows
New loans booked during Q3 FY20 increased by 13 per cent to 7.67 million from 6.77 million in Q3 FY19. Customer franchise increased by 24 per cent to 40.38 million as of 31 December 2019 from 32.57 million as of 31 December 2018.

Provisions spike
Loan losses and provisions (expected credit loss) for the December quarter was at Rs 831 crore against Rs 451 crore from the year-ago period. Bajaj Finance said it has made an accelerated provision of Rs 85 crore in its loan against securities portfolio in the current quarter.