Bajaj Finance drops as Q3 loan losses jumps 48% YoY

As compared with Q2 FY23, the loan losses & provisions increased 15.9% QoQ from Rs 1077.07 crore.

The non-banking financial company (NBFC) reported 22.4% increase in consolidated net profit to Rs 3,638.95 crore on a 31.3% jump in total income to Rs 14,165.98 crore in Q3 FY24 as compared with Q3 FY23.

The consolidated results of Bajaj Finance include the results of its wholly owned subsidiaries, Bajaj Housing Finance (BHFL), Bajaj Financial Securities (BFinsec) and its associate company, Snapwork Technologies.

Operating expenses rose 22% to Rs 3,156 crore in the third quarter as compared with the corresponding quarter last year.

Net interest income for Q3 FY24 grew 26% to Rs 7,655 crore from Rs 5,922 crore in Q3 FY23. Operating expenses to net interest income for Q3 FY24 was 33.9% as against 34.8% in Q3 FY23.

The company stated that it holds a management and macro-economic overlay of Rs 590 crore as of 31 December 2023.

Profit before tax in Q3 FY24 stood at Rs 4,895.52 crore, up 22.03% from Rs 4,011.68 crore in Q3 FY23.

Number of new loans booked during the quarter grew by 26% to 9.86 million as against 7.84 million in Q3 FY23.

Customer franchise stood at 80.41 million as of 31 December 2023 as compared to 66.05 million as of 31 December 2022, a growth of 22%. The NBFC recorded highest ever quarterly increase in its customer franchise of 3.85 million in Q3 FY24.

Deposits book grew by 39% YoY and stood at Rs 58,008 crore as of 31 December 2023. In Q3, net deposit growth was Rs 3,187 crore. Deposits contributed to 22% of consolidated borrowings as of 31 December 2023.

Assets under management (AUM) grew by 35% Rs 310,968 crore as of 31 December 2023 from Rs 230,842 crore as of 31 December 2022.

On the asset quality front, gross NPA and net NPA as of 31 December 2023 stood at 0.95% and 0.37% respectively, as against 1.14% and 0.41% as of 31 December 2022. The company has provisioning coverage ratio of 62% on stage 3 assets as of 31 December 2023.

Capital adequacy ratio (including Tier-II capital) as of 31 December 2023 was 23.87%. The Tier-I capital was 22.80%.

The NBFC's annualized return on average assets (ROA) and return on average equity (ROE) stood at 4.9% and 22%, respectively in the quarter ended 31 December 2023.

Bajaj Finance is engaged in lending and allied activities. It focuses on consumer lending, small and medium-sized enterprises (SME) lending, commercial lending, rural lending, fixed deposits and value-added services.

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