Bajaj Finance AUM likely to grow 10-12% in FY21

The overall provisions for Covid-19 as on June 30 was at Rs 2,350 crore and is now at 10.8% of consolidated moratorium book.

Bajaj Finance is expecting to grow its assets under management (AUM) by 10-12% in the current financial year. The company’s management said during a conference call that 75 cities would revert to pre-Covid-19 volumes by October. The company has registered 7% year-on-year (y-o-y) growth in AUM during June quarter. The moratorium book reduced to 15.7% of AUM as of 30 June 2020 from 27.1% of AUM, as of 30 April 2020. Rajeev Jain, managing director (MD), Bajaj Finance, said that the company, however, expects credit cost to increase by 100-110% as against earlier estimates of 80-90% increase in FY21. Bajaj Finance has also focused on flexi loan product amid Covid-19 stress.

“Given the lockdown, the company decided to convert some of its existing customers with no overdue and good repayment track record from term loan to a flexi loan for a switch fee,” said Rajeev Jain. The flexi product provides the customers with flexibility to drawdown when they need and prepay when they want digitally. “It also has an added feature of only interest servicing for first 1-2 years, he further said. The company has converted `8,600 crore of term loans into flexi loans in June quarter. As of March 31st, the existing book under flexi stood at `36,846 crore.
“The company has revised its margin profile in certain businesses to protect its overall profitability,” Jain said. On mortgage business, the company is facing significant pricing pressure and is repivoting its mix marginally for short to medium term, he added.

BFL Q1 net dips 19%

Bajaj Finance on Tuesday reported a 19% year-on-year (YoY) drop in its net profit to Rs 962 crore in the June quarter, due to higher contingency provisioning of Rs 1,450 crore for the Covid pandemic and impact of lockdown on its business. The overall provisions for Covid-19 as on June 30 was at Rs 2,350 crore and is now at 10.8% of consolidated moratorium book. This along with expected credit loss provisioning of Rs 623 crore takes over all provisioning coverage to 13.7%.

Bajaj Finserv profit grows 44%

Bajaj Finserv reported a 44% rise in consolidated net profit at Rs 1, 215 crore for the June 2020 quarter. Bajaj Finserv’s consolidated income increased by 16% to Rs14,192 crore. There was a degrowth in the finance and insurance business because of the lockdown during Q1FY21, the company said.