Mumbai, India (CU)_ The Indian financial services company Bajaj Finance reported a 29 percent annual decrease in its net revenue for the quarter ended December 31 to Rs 1,146 crore on Wednesday. The non-banking financial company had reported a combined net profit of Rs 1,614 crore in the same quarter last year.
Lower market volume and front-loading of loan losses and provisions due to stress linked to COVID-19 and decrease in the net interest income by Rs 239 crore to Rs 4,296 crore were considered as the major reasons behind the decrease in profit. New loans registered during the quarter were lower at 6.04 million, compared to 7.67 million in Q3FY20. Assets under management raised by 1 percent to Rs 1, 43,550 crore as of December.
Net interest profit for Q3FY21 decreased by 5% to Rs 4,296 crore as compared to Rs 4,535 crore in Q3FY20 due to interest reversals of Rs 450 crore compared to Rs 83 crore in Q3FY20 and surplus liquidity costs of Rs 213 crore compared to Rs 83 crore. MD Rajeev Jain said that during the period, due to COVID-19 related stress, the company made a one-time principal write-off of Rs 1,970 crore.
As of December 2020, for COVID-19 related stress, the company has given Rs 800 crore. Jain said, “If recoveries are better in FY22, we may experience lower net loan loss to average assets”. As of December 31, 2020, the gross non-performing assets (NPA) of Bajaj Finance stood at 0.55 percent and the net NPA was 0.19 percent, as compared to 1.61 percent and 0.70 percent for December 31, 2019, respectively. As of December 31, 2020, the provisioning coverage ratio was 65%.
