Indian non-bank lender Bajaj Finance reported a smaller-than-expected rise in second-quarter profit on Tuesday, as provisions for bad loans increased.
The company’s consolidated profit after tax rose nearly 28 per cent to Rs 3,551 crore in the three months ended September 2023, missing analysts’ average estimate of Rs 3,585 crore, according to LSEG data.
Consolidated numbers include the businesses of the lender’s subsidiaries, Bajaj Housing Finance and Bajaj Financial Securities.
Loan losses and provisions grew nearly 47 per cent year-on-year in the quarter to Rs 1,077 crore, up from Rs 734 crore a year ago. It also rose sequentially from Rs 995 crore in April-June.
The RBI has been cautioning lenders about fast-growing personal loan categories for signs of nascent stress, urging them to adopt stronger risk management practices.
The company’s gross non-performing asset ratio deteriorated to 0.91 per cent at the end of September, from 0.87 per cent at the end of June.
Loan demand during the quarter stayed strong despite the Reserve Bank of India (RBI) keeping its key lending rate steady for a fourth consecutive policy meeting.
The central bank has raised interest rates by 250 basis points since May 2022.
Bajaj Finance, in an update earlier this month, reported its new loan bookings climbed 26 per cent year-on-year in the quarter, while its deposits book jumped 39 per cent .
It added 3.58 million new customers in the period.
Net interest income, the difference between interest earned on loans and paid on deposits, rose over 26 per cent to Rs 8,845 crore in the September quarter, while interest income jumped nearly 38 per cent.