A customer holds a bundle of Indian rupee banknotes while filling in a deposit form in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)  

Bajaj Finserv’s Profit Rises 3% Driven By Consumer Finance Business 

Bajaj Finserv Ltd. reported a consolidated net profit of Rs 535 crore in the January-March quarter, as compared to Rs 518 crore in the year-ago period.

The non-banking finance company’s consumer finance arm, Bajaj Finance Ltd.’s net profit jumped 43 percent to Rs 449 crore, indicating that it’s shaken off the effects of demonetisation in the December quarter.

“We have gone a little slow on the loan against property business after demonetisation. That was a tactical call. Our consumer businesses have grown strongly, digital personal loans, business loans, have grown well,” G Sreenivasan, chief financial officer of Bajaj Finserv told BloombergQuint.

The company’s loan against property portfolio stands at about Rs 8,500 crore or 14 percent of the total loan book, said Sreenivasan. Assets under management in the consumer finance business rose 36 percent to Rs 60,194 crore.

Bajaj Finserv’s net non-performing assets (NPA) burden stood at 0.44 percent at the end of the March quarter. Small and medium enterprises business’ NPA ratio stood at 0.6 percent of the loan book, while the consumer finance business’ ratio stood at 0.5 percent. Bad loans as a percent of the rural loan book stood at 0.1 percent.

“All business lines are holding quite well. We have also tightened our credit risk parameters and are being selective in certain segments,” Sreenivasan said.

Bajaj Allianz Life Insurance Co. reported a reduction in gross written premiums during the January-March quarter, as the company tried to move away from group insurance plans to more long-term individual plans. Bajaj Allianz General Insurance Co. reported a moderation in its net profit, to Rs 165 crore from Rs 208 crore last year.

“Profit came down due to some one-time impact in the quarter,” Sreenivasan said.

Capital adequacy ratio of the consumer finance business stood at 20.3 percent, compared to the regulatory requirement of 15 percent.

“We are well capitalised for this financial year. We are not looking at raising any fresh capital,” Sreenivasan added.