Bajaj Finance Q2 results: Profit falls 36% to Rs 965 crore, NII up 4%

Bajaj Finance, a subsidiary of Bajaj Finserv, on Wednesday reported a 35.94 per cent decline in consolidated net profit at Rs 965 crore for the second quarter ended September 30, 2020. The non-banking financial company (NBFC) had posted a consolidated net profit of Rs 1,506 crore in the same quarter last year, Bajaj Finance said in a regulatory filing.

Net interest income of the company was up by 4 per cent to Rs 4,165 crore from Rs 4,000 crore in Q2 FY20. "During the quarter, as a measure of prudence, the company has reversed capitalised interest of Rs 142 crore. The total amount of interest income reversed in H1 FY21 was Rs 361 crore," Bajaj Finance said in a filing to BSE.

Consolidated assets under management (AUM) increased by 1.15 per cent to Rs 1.37 lakh crore in Q2 FY21 compared to Rs 1.35 lakh crore in the same period last year.

New loans booked during July-September quarter were 3.62 million as against 6.47 million in Q2 FY20. Customer franchise stood at 44.11 million as against 38.70 million as of 30 September 2019.

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The total operating expenses was down by 16 per cent to Rs 1,160 crore from Rs 1,384 crore in Q2 FY20 as the company took measures to reduce operating expenses in April 2020. Total operating expenses for Q22 FY21 were lower by Rs 224 crore on year on year basis.

On the asset quality front, Bajaj Finance's gross non-performing assets (NPA) declined to 1.03 per cent as against 1.61 per cent in the year ago period. Net NPA also fell to 0.37 per cent from 0.65 per cent in the same period last year. The provisioning coverage ratio was 64 per cent.

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Loan losses and provisions for Q2 FY21 was Rs 1,700 crore as against Rs 594 crore in Q2 FY20. In wake of the ongoing pandemic, the company has further increased its provisions on stage 1 and 2 assets by Rs 1,370 crore to Rs 5,099 crore as of 30 September 2020 as against Rs 3,729 crore in June quarter of 2020. The company has strong pre-provisioning profitability to manage loan losses arising out of COVID-19, it said.

Following Q2 earnings, shares of Bajaj Finance were trading 3.4 per cent lower at Rs 3,151.25 on the BSE.