Bajaj Finance Q3 Results: Net Profit Up 40% On Lower Provisions

Bajaj Finance's Q3 consolidated net profit rose 40% year-on-year to Rs 2,973 crore.

<div class="paragraphs"><p>(Source: Unsplash)</p></div>
(Source: Unsplash)

Consumer financier Bajaj Finance Ltd. saw its net profit rise on better interest income from loans, and lower provisions against bad loans in the October-December quarter.

Consolidated net profit for the quarter rose 40% year-on-year to Rs 2,973 crore. Net interest income for the third quarter stood at Rs 7,435 crore, up 24% from a year ago.

Consolidated assets under management for Bajaj Finance improved 27% from the previous year to Rs 2.3 lakh crore. The company only added net loans worth Rs 12,476 crore during the quarter, as pricing pressures led to slower growth in the mortgage business. The cost of funds increased by 23 basis points quarter-on-quarter to 7.14%.

Loan loss provisions fell to Rs 841 crore, compared with Rs 1,051 crore a year ago. The gross non-performing asset ratio improved marginally to 1.14%, while the net NPA stood at 0.41%.

Overall stage-2 assets stood at Rs 2,860 crore as on Dec. 31, as opposed to Rs 3,155 crore as on Sept. 30. Overall stage-3 assets rose to Rs 2,610 crore as on Dec. 31, compared to Rs 2,530 crore as on Sept. 30.

Two- and three-wheeler vehicles recorded the highest asset quality issues with a gross NPA ratio of 5.99%. However, it was lower than the second quarter, when the gross bad loan ratio was 8.01%.